The Senate at the 14th plenary meeting on April 24 approved the amendments to the Tax Code which lifting VAT for a number of food items.
Chairman of the Budget and Economic Reforms Committee Erkin Gadoev said that the consumption of vegetable oil in Uzbekistan is at 460 thousand tons per year, half of which is covered by imports.
He said that vegetable oil prices rose by 86% on world markets over the year, and by 21% year-to-date.
In particular, it is planned to waive VAT from May 1 to December 31, 2021:
- import of vegetable oil, sunflower and flax seeds, as well as soybeans;
- turnover for the production and (or) sale of vegetable oil.
In addition, export duties are introduced:
- for sunflower and cotton seeds - 30% of the customs value, but not less than US$ 0.2 per kg;
- for sunflower oil - 20%, but not less than US$ 0.2 per 1 kg;
- cottonseed oil - 50%, but not less than 0.5 kg.
The Deputy Finance Minister Dilshod Sultanov said that as a result of the waiving vegetable oil imports from VAT, the budget would receive 267 billion soums less taxes.
According to him, due to the improvement of tax administration and the search for additional sources, the volume of tax revenues from VAT increased by 200 billion soums.
From January 1, 2021, Uzbekistan has abolished the excise tax on 73 items: 20 types of food items - juices, cheese, cottage cheese, margarine, confectionery flour products, sausages and similar meat products), electrical engineering (35 types of goods - refrigerators, TVs, gas stoves, vacuum cleaners, washing machines) and others.
Dilshod Sultanov said that this paved the way for legal imports and collecting an additional 235 billion soums. This figure is expected to grow to 1 trillion soums by the end of the year.
He noted that due to these two sources it will be possible to cover the budget losses due to the zeroing of VAT on the import of vegetable oil.
Earlier, Deputy Chairman of the Central Bank Behzod Khamraev said that the government is considering options for centralized intervention in the vegetable oil market and reducing the cost of transportation costs for imports.
For the amendments to take effect, they must be signed by the president.