Thursday, 21, November, 2024

Finances

This statement summarizes discussions between the authorities and IMF staff in Tashkent during October 30-November 8, 2018. A previous round of discussions took place in July 2018. The authorities have continued to press ahead with economic and social reforms on all fronts. The discussions focused on the economic outlook, especially for inflation, the 2019 budget, reducing credit market segmentation, improving statistics, and better coordinating technical assistance.

A delegation of the European Investment Bank headed by the EIB Vice President Vazil Hudák will take part in the First International Tourism Investment Forum (MIF) in Tashkent on 19-21 November 2018.

Over 240,000 residents in five cities across Uzbekistan are to benefit from improved efficiency and quality of heating and hot water services, thanks to the District Heating Energy Efficiency Project. The World Bank supports the project with a US$140 million International Development Association credit approved in January 2018. On November 7, 2018, the project was officially launched in Bukhara together with the Ministry of Housing and Communal Services (MHCS) officials, local authorities, respective utility service providers, potential beneficiaries and World Bank project team.  

At Uzbekneftegaz building were held talks between the Uzbekneftegaz Chairman B. Ashrafkhanov and the officials of Total E&P Activités Pétrolières and PJSC NOVATEK, Uzbekneftegaz said.

IFC, a member of the World Bank Group, will help the Government of Uzbekistan to increase access to a quality dialysis care for patients suffering from kidney failure. With more than 1,000 patients on a waitlist for this life-saving medical service, this will be an important project for the country.

The key macroeconomic figures, the concept of tax and budget policies and the draft 2019 budget, as well as the forecast figures for 2020–2021 were approved at the meeting of the Cabinet of Ministers of Uzbekistan on Saturday, UzA said. The documents are due to be submitted to the Legislative Chamber of the Oliy Majlis.

As of 2019, Uzbekistan will for the first time implement a mechanism for medium-term budget planning by approving the state budget for the next year and the budget guidelines for the next two years.

As envisaged by the Tax Policy Improvement Concept, approved by the June 29 presidential decree, as of 2019:

1) tax burden on salary fund shall be reduced through:

  • introduction of flat personal income tax rate of 12% and scrapping the payment of insurance premiums by citizens (8% of wages);
  • reducing the unified social contribution rate down to 12% (currently 15%) of the salary fund;

2) mandatory contributions of 3.2% to state trust funds levied on turnover (revenue) will be canceled;

3) reduction of: corporate income tax rate from 14% to 12%, bank income tax from 22% to 20%, tax at source paid for income on dividend and interest from 10% to 5%; property tax of legal entities - from 5% to 2%.

As a result, about 10 trillion soums should remain at the disposal of economic entities and the public.

The meeting also considered the following proposals for improving tax policy:

  • adjustment of tax rates established in the absolute amount (land tax, water tax, excise tax);
  • introduction of combined excise cigarette tax, which provides for the use of ad valorem rate along with fixed rate;
  • introduction of single social payment for individual entrepreneurs in place of insurance contributions of citizens (due to its cancellation);
  • introduction of minimum fixed rates in absolute amount for subsoil use tax for some minerals (sand, limestone, crushed stone, etc.).

In 2019, the social sphere and social support of the public will be in the center of the state budget expenditures (at 54% of total expenditures).

From January 1, an increase in pay is scheduled for:

  • teachers and school principals- by 10%, teachers with a qualification category - differentially by 15% to 25%;
  • low-paid public servants – differentially by 5-15%.

The proposed measure for low-paid categories of workers will affect more than 360 thousand people only in the public sector.

The 2019 budget provides funds to increase the pay of university teachers and staff at research institutes by 1.5 times, medical and pharmaceutical workers at state companies by an average of 26.5% (in addition to the 20% increase from December 1, 2018). The overall increase in pay of public servants should not be lower than the inflation rate. Budget funds for the payment of social benefits will increase by 20%.

Investment expenditures are estimated at 11.9 trillion soums, which will be used to implement strategic projects determined by the decisions of the President and the Cabinet, including projects for the construction and reconstruction of drinking water distribution networks, water facilities, construction and reconstruction of the transport and communications infrastructure educational and medical-social institutions.

More than 12 trillion soums will be contributed to finance the health sector. In particular, the purchase of medicines and medical products - about 1 trillion soums, for basic health sector programs - 661.5 billion soums, equipping medical institutions with modern diagnostic, laboratory and medical equipment - 58 billion soums.

In connection with the falling incomes of the extra-budgetary Pension Fund due to a radical reduction in the unified social payment rate and the abolition of insurance contributions of citizens and mandatory deductions, the budget expenditures provide for 4.7 trillion soums to cover the deficit.

The Ministry of Finance was instructed to publish the “Citizens Budget” project on its official website until November 15.

The Uzbek state will sell its share in JSC UzEX, it says in the decree of President Shavkat Mirziyoyev. The Competition Committee has been instructed to submit to the Cabinet of Ministers proposals to sell the state's share in UzEx via initial (IPO) or secondary (SPO) public offer on Toshkent Stock Exchange within two months.

Thanks to the Emergency Medical Services Project, better trained and managed medical personnel in hospitals across Uzbekistan will be appropriately equipped to help millions of people impacted by accidents and medical emergencies. The project was approved in April 2018 by the World Bank’s Board of Executive Directors and will be financed by a US$100 million credit.

The net foreign exchange reserves of Uzbekistan on October 1 amounted to US$ 25.49 billion, decreasing by US$ 489 million over the month , the Central Bank of Uzbekistan said in a report.

Following the adoption of a new country strategy for Uzbekistan, the EBRD is providing funds for the development of sustainable solutions for the municipal and power infrastructure sectors in the country.

The Republic of Uzbekistan and the European Investment Bank (EIB) are opening a new chapter in their relationship by signing two landmark loans that will be beneficial to both the country and the environment.

New World Bank research released today gives policymakers compelling evidence that delivering better outcomes in children’s health and learning can significantly boost the incomes of people—and of countries—with returns far into the future.

The Big Four audit firms have joined the drafting of Uzbekistan’s new tax code, the Ministry of Finance said. The Ministry initiated a videoconference with the experts on global tax policy and administration at Deloitte in overseas offices.

President Shavkat Mirziyoyev chaired a government meeting Wednesday to discuss the state of socio-economic development in the 9 months of 2018 and the expected results for the year-end.

Uzbekistan delegation led by Deputy PM/Chairman of Investment Committee Sukhrob Holmuradov will on October 12-14 attend the next Annual Meeting of the Board of Governors of the World Bank and the International Monetary Fund in Indonesia.

Uzbekistan-France business forum was held in the French capital ahead of Shavkat Mirziyoyev’s visit to France on Friday. As part of the forum, the National Bank of Uzbekistan signed loan deals with French banks, one with Crédit Agricole worth € 300 million, another one with NATIXIS worth € 500 million euros.

The EBRD Board of Directors has approved a new strategy for Uzbekistan for 2018-2023. The strategy reflects recent changes in the country’s political and macroeconomic environment and is aimed at the creation of an open, integrated and export-driven economy.

This week, the Turin Polytechnic University in Tashkent hosted a workshop on the issues of transparency and openness in the public procurement sector in Uzbekistan. The event was organized by the World Bank in partnership with the National Agency for Project Management (NAPM) and the State Investment Committee (SIC) of Uzbekistan.

The Saudi Arabia-based Islamic Corporation for the Development of the Private Sector (ICD) has signed sharia-compliant financing agreements with six banks in Uzbekistan, boosting the former Soviet state’s efforts to develop Islamic finance.

Today, the National press center hosted a press conference with the officials of the Central Bank and QishloqQurilishBank.