President Shavkat Mirziyoyev signed a decree on a new business classification and measures to improve tax policies and administration, the Ministry of Justice said.

Enterprises will be classified according to their annual turnover (currently including by the number of employees) and will fall into the following categories:

a) small business:

• individual entrepreneurs;
• micro-firms - entities whose founders are individuals, with a turnover of up to 1 billion soums during a calendar year;
• small enterprises - entities with an annual turnover of 1 billion to 10 billion soums;

b) medium business - entities with an annual turnover from 10 to 100 billion soums (now there is no concept of medium business).

c) large business - entities with an annual turnover from 100 billion soums;

From April 1, 2023, the State Fund for Entrepreneurship Support will cover part of the costs - up to 50% - for property insurance once a year for medium businesses. This part should not exceed 20 times the size of the basic settlement unit (BSU).

In addition, for businesses with a turnover of at least 10 billion soums, a 20 percent quota is introduced in public procurement and in contracts entered into with budget-financed customers as part of these procurements. It also provides for an advance payment of 50%.

From the same date, when selecting the best proposals and evaluating the proposals of bidders for public procurement, the amount of VAT will not be taken into account.

Starting from April, the procedure for covering the costs of enterprises - exporters of high value-added copper products related to the production of goods and their sale in foreign markets, in the amount of up to 6% of the export value, has also been canceled.

The Ministry of Economy and Finance was instructed to submit to the Cabinet of Ministers within two months a draft government decree providing for the identification of “reliable taxpayers” without the participation of the human factor and giving them priority in public procurement.

The amount of deductions to the Innovation Support Fund for the Navoi Mining and Metallurgical Plant has been set at a fixed amount of 10 billion soums (now up to 10% of profit before income tax).

In addition, it is established that the gratuitous transfer to state healthcare institutions or the sale of medicines at a lower cost due to the short shelf life of them are recognized as “economically justified expenses (losses)” and, accordingly, are deducted when calculating income tax.

President Shavkat Mirziyoyev announced a new business classification in August 2022 at a meeting with entrepreneurs, as well as other support measures that were included in the Tax Code. In particular, enterprises that have switched from small to medium businesses will pay only 50% income tax within two years.