Sunday, 03, December, 2023

Single tax rate will be introduced for micro-businesses in Uzbekistan, instead of the turnover tax, announced President Shavkat Mirziyoyev this at an annual meeting with business leaders on August 22, his spokesman Sherzod Asadov said.

Shavkat Mirziyoyev put forward initiatives to support businesses in 5 areas.

The first area is the definition of a special approach to supporting businesses with their division into categories.

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

  • entities with an annual turnover of up to 1 billion soums will be categorized as a microbusiness;
  • entities with an annual turnover of up to 10 billion soums - small business;
  • entities with an annual turnover of up to 100 billion soums are medium-sized business (now there is no concept of medium business).

Based on this, from January 1, 2023, a single tax rate of 4% will be introduced for microbusinesses instead of the current turnover tax rates - from 4% to 25%.

While, the current rates of 1% and 2% for businesses in remote areas and certain categories will be conserved.

Should 20-30 million soums be paid per year voluntarily, they will be relieved from the obligation to keep and submit accounting reports to the tax authorities.

Enterprises of the second category, that is, whose turnover exceeds 1 billion soums and which switched to the general procedure for paying taxes (VAT and income tax), shall pay 2 times less income tax during the year.

“These will help facilitate activities and give a powerful incentive to 370,000 businesses,” the president said.

To do this, from January 1, 2023:

  • enterprises that have switched from small to medium-sized businesses will pay only 50% income tax within two years;
  • 50% of property insurance costs will be reimbursed by the state;
  • simplified tax, financial and statistical reporting will be introduced for them;
  • a 20% quota for government purchases will be set, within the framework of these government purchases they will be paid an advance payment of 50% (currently 15%).

In 2019, the Chamber of Commerce and Industry proposed to introduce the concept of “medium business” in Uzbekistan, where they wanted to include companies with 20 to 150 employees, depending on the area and revenue from 1 to 3 billion soums, but the project was not accepted.

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