On December 9, a regular meeting of the Legislative Chamber of Oliy Majlis took place, during which the draft law “On amendments and addenda to the Tax Code of the Republic of Uzbekistan” was adopted in the second reading.

The draft law on the Tax Code, introduced by the Cabinet of Ministers to the Legislative Chamber, as amended, was adopted from a conceptual point of view by deputies in the first reading at the meeting on November 26. 

The new edition of the Tax Code acquires the status of a direct action document with the maximum reduction of reference norms and by-laws in it. In this regard, the project provides for the determination of rates for all types of taxes (excluding excise tax, land tax and tax for the use of water resources).  

In addition, the draft provides for a number of norms aimed at the maximum simplification of the application of tax legislation, eliminating contradictions and conflicts, strengthening the protection of the rights and legitimate interests of bona fide taxpayers by improving the forms and mechanisms of tax control. It also focuses on the widespread introduction of modern ICT, providing the most complete coverage and accounting of tax objects and taxpayers. In particular, a new tax control procedure is proposed (desk audit, field audit, tax audit).

A risk analysis program is being introduced. In accordance with it, all operating economic entities on the basis of certain criteria, according to the danger, are automatically divided into 3 segments (green, yellow, red tracks) without the human factor.

Enterprises with a low degree of danger (green track) will not be assigned tax audits and they will be provided with high-level tax services. At the same time, enterprises with an average level of danger (yellow track) will be assigned only desk audits and they will be given the opportunity to correct errors in their report. Moreover, financial and administrative fines will not be applied to them. In addition, enterprises with a high degree of danger (red track), where the cases of tax evasion, falsification of accounting documents and invoices are identified, will be assigned tax audits. As a result, such enterprises will be constantly monitored.

According to deputies, these measures will ensure transparency in the implementation of tax control and the prevention of possible cases of corruption.

In addition, the types of tax audits reduced from 13 to 3 types.

It is proposed to introduce a mechanism for the timely return of the amount of excessively paid tax. That is, the tax authority will pay a penalty to the taxpayer for each overdue day for the return of the tax amount. For foreign tourists, a VAT refund will be introduced on the basis of the “tax free” principle. Payment of VAT will be canceled upon the gratuitous transfer of property (services). The single social payment rate is reduced from 25 to 12% for state enterprises with a state share in the authorized capital of which is 50% or more.

Besides, the draft provides for the suspension by the tax authorities of operations carried out by the taxpayer on bank invoices for a period not exceeding 30 days.