President Shavkat Mirziyoyev today signed the Improving Uzbekistanis Tax Policy Decree cuttıng the value added tax (VAT) from 20 to 15% as of October 1, a source in the government told the Tashkent Tımes.

When preparing the draft state budget for 2020, the Government has been instructed to take into account that in line with the decree the simplified procedure for calculating and paying the VAT has been abolished and the base corporate tax rate has been fixed at 15%, while keeping the tax rate on income paid in the form of dividends.

In addition, it is planned to cut the single social payment rate from 25% to 12% for state enterprises, legal entities with a state share in the authorized capital of 50% or more, as well as for legal entities, in the authorized of which 50% or more belongs to a legal entity with a state share of 50% or more, and their structural divisions.

From October 1, the collected single tax payments, previously credited to the off-budget Pension Fund under the Ministry of Finance, shall credited to the budgets of Karakalpakstan, local budgets of provinces and the city of Tashkent.

The decree also cancels the current procedure for suspension by the state tax service of operations on taxpayer accounts in banks. Based on best foreign practice, the draft new version of the Tax Code should provide for a procedure for suspension by tax authorities of operations on taxpayer accounts in banks for a period of not more than 30 days based on the results of the “risk analysis” and taking preventive measures.

On September 11, Shavkat Mirziyoyev instructed the Ministry of Finance to develop proposals to cut the VAT. The next day, the Ministry of Finance, announced that cutting the rate, down to 15%, together with measures to ensure its neutrality, proposed in the new version of the Tax Code, will have a beneficial effect on doing environment."