The Ministry of Economy and Finance in its budget-related address presented proposals for the main axes of tax and customs policies for 2024–2026.
The current rates for income tax (15%, for certain categories - 20%), personal income tax (12%), social tax (budget-financed organizations - 25%, others - 12%), turnover tax - 4%, as well as fees for the transit of cars through the territory of the country and fees for the right to sell alcoholic beverages were proposed to remain unchanged in 2024.
While, the rates for VAT (12%), excise tax for mobile communication services (10%), land tax for agricultural land (0.95%), and property tax for legal entities (1.5%) will not be changed if approved.
Proposed changes
As part of the promotion of a healthy lifestyle and environmental protection, from January 1, 2024, it is proposed to double the excise tax rate on alcohol - from 7,400 to 14.9 thousand soums per 1 liter.
The excise tax on alcoholic beverages will increase by 5% from July 1. On imported vodka, cognac and other alcohol, the excise tax is proposed to be reduced by 5% to cut the difference between rates to align with WTO requirements.
From April 1, 2024, the excise tax rate on gasoline with a high content of harmful gases shall be factored by 12% (1 liter of AI-80 gasoline will rise in price by 1%, or 88 soums, methane - by 3%, or 84 soums), while the excise tax rates on gasoline with an octane rating of 91 and higher will not change.
From April 1, it is also proposed to introduce an excise tax of 500 soums per 1 liter on carbonated drinks containing sugar, taking into account the possible increase in diseases, including diabetes, with excessive consumption. There is such a tax in over 50 countries (France, Hungary, Great Britain and others). Proceeds from the excise tax will be contributed to the Medicine Development Fund.
From July 1, 2024, it is planned to introduce a recycling fee in of the 0.3% BSU (990 soums) (BSU = 330 thousand soums) based on the weight of one car tire (per kg). Based on the weight of a light car tire (from R13 to R20), the fee will be from 6,200 to 16,200 soums, and for trucks (from R16 to R18) - from 11,300 to 58,800 soums.
The proceeds from the recycling fee are planned to be used to finance projects of the Yashil Makon program and environmental protection.
There will also be a road tax in the amount of 5 times the annual BSU (1.65 million soums) for trucks weighing more than 10 tons, taking into account damage to republican and local roads from trucks. The funds will go to the highway development trust fund.
Excise tax rates on alcohol and tobacco products will increase by 12%. For example, a 0.5 liter bottle of vodka will rise in price by 448 soums, a pack of cigarettes (Kent 6) - by 601 soums.
From January 1, 2024, the tax rate on the volume of water used for irrigation of agricultural land and fish farming will be set at 80 soums per cubic meter without water meters; in case of presence of meters, a reduction factor of 0.7 may be applied to the rate.
The cost of water for industrial enterprises, power plants, public utilities, as well as used for car washing, production of soft and alcoholic drinks will increase by 12%, and for other enterprises and individual entrepreneurs - by 30%.
Increase in flat taxes
From February 1, 2024, it is proposed to increase the tax rates of fixed personal income tax by 10%.
For property lessors, from January 1, 2024, minimum monthly rental rates for individuals can be established in the following amounts (currently):
25 thousand soums per sq. m of residential premises in Tashkent, 12 thousand soums - in provincial centers, 5,000 soums - in other areas;
40 thousand soums per sq. m of non-residential premises in Tashkent, 23.5 thousand soums - in provincial centers, 10 thousand soums - in other areas;
monthly rental for passenger cars (vehicles with no more than 8 seats, excluding the driver’s seat) - 780 thousand soums, 1.55 million soums - for minibuses, buses and trucks.
From April 1, it is proposed to introduce minimum rental rates into contracts for the free use of real estate for individuals (except for contracts between close relatives) and contracts for the free use of real estate for legal entities.
District and city councils of people's deputies may receive the right to apply an increasing factor of up to 3 times the size, based on real rental prices on the market.
Individuals are asked to transfer 10% of income tax from leasing property to the makhalla (neighborhood) budget.
From January 1, 2024, the turnover tax rate in a fixed amount will be 25 million soums per year (now - 20 million soums) if the taxpayer’s turnover is up to 500 million soums, and 34 million soums (now - 30 million soums), if the turnover exceeds 500 million sum
Starting next year, when determining the tax base for calculating property tax for individuals, non-residential properties will also be taken into account, and a taxation procedure will be introduced similar to the taxation procedure using the minimum amount when calculating property tax for legal entities.
When determining the property tax of legal entities, the tax base for buildings cannot be lower than the minimum value established in absolute value per 1 sq. m. m in the following sizes:
in Tashkent - 3 million soums (previously 2.5 million soums);
in Nukus and regional centers - 2 million soums (1.5 million soums);
in other cities and rural areas - 1.2 million soums (1 million soums).
From 2024, property tax rates and basic land tax rates for individuals will increase by an average of 12%. The amount of tax calculated on the basis of the cadastral value determined in 2018, next year cannot exceed the amount of tax assessed for 2023 by more than 1.3 times.
Special types of fixed tax rates for subsoil use tax (except for limestone intended for cement production) will be indexed by 12%.
At the same time, for enterprises with a predominant state share, tax rates for subsoil use for all deposits, including new deposits, are set at the following amounts:
Navoi Mining and Metallurgical Combine JSC (NMMC), Almalyk Mining and Metallurgical Combine JSC (AMMC) 10% for gold, 15% for palladium, silver and copper, for Navoiuran - 16% for uranium;
The tax rate of 22.5 thousand soums on limestone intended for cement production has been reduced to 11.25 thousand soums per ton. The reduced tax rates established for cement factories operating only on coal are also cancelled.
Creating equal conditions and eliminating benefits
To ensure the integrity and continuity of the VAT chain and create equal conditions for entrepreneurs, from April 1, 2024, it is proposed to abolish the following VAT benefits:
import and turnover for the sale of medicines, medical and veterinary products, as well as raw materials for the production of medicines, medical and veterinary products;
medical and veterinary services.
At the same time, citizens included in the social register will be able to return the VAT amount when purchasing medicines through cashback.
From April, it is also proposed to abolish the “zero” VAT rate on services provided to the population in the field of water supply, sewerage, sanitation and heat supply.
From this date, it is planned to expand the category of taxpayers by imposing VAT on foreign individuals providing services on the territory of Uzbekistan.
From April, it is proposed to abolish preferential tax rates for income tax (7.5%) and turnover tax (2%) for e-commerce participants.
In addition, it is planned to establish a procedure for taxing the self-employed at a rate of 4% (as a turnover tax for individual entrepreneurs) if their annual income exceeds 100 million soums. Therefore, it is planned to compare the types of activities of individual entrepreneurs and the self-employed and then revise their list.
In addition, the zero rates of customs duties provided for the import of certain food and non-food products, new construction and special equipment, as well as vehicles for the transportation of goods and tourist services are expiring.
