A letter signed by the Deputy Minister of Higher Education, Science, and Innovations, Sarvar Buzrukhonov, addressed to university rectors, has been circulated on social networks.
The letter, dated June 19, 2024, stated that income tax should be deducted from students' awards and incentive payments. The ministry requested rectors to transfer the required income tax funds to the budget and submit information confirming payment by 11:00 AM on June 21.
The letter was based on a document developed by the Tax Committee and announced on June 6, 2024. According to this document, the Accounting Chamber, during its review, identified shortcomings in tax legislation compliance within the Ministry of Higher Education, Science, and Innovations organizations and reported this to the Tax Committee on May 21.
The Tax Committee requested organizations within the Ministry to submit clarified tax reports or justifications for identified discrepancies. It was also emphasized that if the shortcomings were not addressed, a tax audit would be conducted as per the established procedure.
The Tax Committee’s letter did not mention anything about deducting tax from students' incentive payments. So, under which legislation are these incentive payments being taxed?
According to Kun.uz sources, some university rectors have already been forced to pay income tax on previously paid incentive payments. However, there is no such provision in the current tax legislation.
In January 2024, it was reported that income tax was being deducted from incentive payments given to students of the Tashkent State Pedagogical University named after Nizami. Following this, Shukhrat Ismailov, head of a department at the Tax Committee, announced that the incentive payments given to students should not be subject to personal income tax.
He emphasized that Article 369 of the Tax Code specifies types of income not included in the total income of individuals. It states that one-time monetary awards paid to individuals based on decisions by the Cabinet of Ministers are not included in the total income of individuals and are exempt from personal income tax.
“Based on this, the payments made by this higher education institution to encourage students should not have been subject to personal income tax as a tax agent. We have contacted the institution and provided appropriate explanations,” said the official.
On June 21, during a meeting between the youth and the minister, a student asked Minister Kungirotboy Sharipov for an explanation regarding this issue. Sharipov, acknowledging his awareness of the situation, explained why such a letter was sent to universities.
“This issue arose after a recent inspection. However, we are currently working on it. In reality, if you had known about it, we would not have sent it because our goal is not to create problems for you. The laws are changing, and perhaps there are misunderstandings,” said the minister.
Maksud Hamroev, head of the Ministry's Department of Financial-Economic and Infrastructure Development, clarified that the letter regarding income tax on students' incentive payments does not affect scholarships or other payments. He emphasized that universities continue to provide incentive payments and that the issue of income tax will be resolved soon.
“The solution is already in place. No student will lose out. The payment system will be set up and implemented shortly. Currently, there are no obstacles. The issue of tax collection is being reviewed, and we are considering maintaining the previous status,” said the official.
Kun.uz sent an inquiry to the Tax Committee to find out whether amendments to the law regarding income tax deductions from students' incentive payments are expected.
