Uzbekistan is planning to simplify the VAT refund process for food service businesses. Aziz Umurzakov, a department director at the Tax Committee, shared the details while discussing measures reviewed during a presentation made to the president on Tuesday.
According to Umurzakov, the presentation focused on removing hurdles to business growth, cutting administrative red tape, and creating an environment where entrepreneurs can focus more on expanding their operations.
“The objective set during the presentation was to eliminate barriers hindering business activity, reduce the administrative burden, and establish the most favorable conditions possible so that business owners can dedicate the majority of their time to growth,” he explained in an interview with the Uzbekistan 24 news channel.
Umurzakov noted that one specific measure involves streamlining the VAT "cashback" system for the hospitality sector.
“Currently, cafes and restaurants can receive a refund of 20% to 40% of their paid VAT. The exact amount depends on the share of non-cash payments in their total revenue. For instance, if digital transactions account for 60% of a restaurant's total turnover, they are eligible for a 40% VAT refund,” the Tax Committee official stated.
He added that if the share of non-cash payments is lower, the refund amount decreases accordingly.
“If this figure is lower, the refund drops, and the business receives 20% instead of 40%,” Umurzakov explained.
Furthermore, according to the presidential press service, compliance procedures related to environmental impact assessments and compensation payments will be eased for specific retail, hospitality, and service sector businesses.
There are also proposals to clarify and define certain procedures regarding labor relations between employers and employees.
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