NEWS AND EVENTS
August 17, 2006
PRESS-RELEASE: On Uzbekistan\'s Tax Policy and Macroeconomic Forecasts for 2007
Cabinet of Ministers of Uzbekistan approved draft concept of tax policy for 2007 on Friday, 11 August.
The policy envisages decrease of tax burden on economic entities and unification and simplification of the taxation system. The document also sets macroeconomic forecasts for 2007.
The concept envisages reduction of the income tax for legal entities from 12% to 10%. The single tax payment will be reduced from 13% to 10%, which is expected to boost growth of small and private business, and increase the share of private sector in the economy.
The decrease of income tax will allow economic entities to save at least for 37 billion soums, which they can direct to modernization and re-equipment of capacities or increase of production and salaries of employees.
At the same time, the government plans to decrease single social payment from 25% to 24%, which should increase income of population.
The document stipulated exclusion from tax base payments for telecom services and advertising expenses from the taxed income of legal entities, which is aimed at stimulating business activities of entrepreneurs and promotion of local products on the domestic and foreign markets.
The government also plans to cut duty for purchase or temporary import of trucks, buses and special transport means from 20% to 6%, which will allow local production, transport and tourism firms to update their fleets.
Cabinet of Ministers\' pres service said the document envisages decrease of income tax for individuals. The lower scale of income tax for individuals is expected to be set at the level of 13%.
The medium scale of income tax for individuals will be reduced from 20% to 18%, which is applicable to incomes equal from 5 up to 10 minimal size of salary and the higher level will be decreased from 29% to 25%. The press service said this should increase incomes of people.
The document proposes to change structure of income part of the State Budget due to step-by-step decrease of the share of income tax and simultaneous increase of the share of resource taxes. The press service said this will allow rational use of natural resources.
At the same time, the blueprint proposed to decrease tax for entrails in production of oil from 35% to 20%, gas condensate from 32% to 20% and natural gas from 58% to 30% and reduce excise tax for petroleum from 45% to 28% and diesel fuel from 40% to 25% and kerosene for aircrafts from 20% to 8%.
The document directed to unification and simplification of taxation, mechanism on calculation and order of payment of taxes and obligatory payments, the press service of the government said. In particular, the government plans to introduce single tax payment from turnover to trade companies.
The new system will replace five types of taxes and obligatory payments and complex tax system and offers to set tax at the level of 5% to cities with population of over 100,000 people, 3% in other settlements and 1% in regions, which is difficult of access or located in mountain areas.
The measures laid down in tax policy for 2007 envisages that the real growth of GDP will make up 7.7%, industrial output - 10%, investments - 8% and reduce inflation to 5-7%, as well as increasing real incomes of the population by at least 17%.
The Cabinet of Ministers approved the draft tax policy concept and made a decision to use it as a basis for preparation of the state budget for 2007.