Uzbekistan plans to radically simplify conditions for small business development: the revenue threshold will be increased fivefold, and the VAT payment procedure will be simplified. The new rules will come into effect on June 1.
President Shavkat Mirziyoyev reviewed a number of initiatives aimed at reducing the tax burden, simplifying administration, and encouraging entrepreneurs to grow without going into the shadows. It is noted that in recent years the state has taken a number of steps to support entrepreneurs, but the current rules still hinder the natural expansion of companies.
One of the main problems is the annual turnover threshold of 1 billion soums set back in 2019. When exceeded, entrepreneurs are forced to switch to the general tax regime with VAT and income tax. During this time, prices have risen significantly, and businesses approaching the limit are often forced to hide turnover — by splitting the company or not issuing receipts.
To eliminate this barrier, it is proposed to increase the threshold to 5 billion soums from June 1, 2026. This will allow entrepreneurs to grow without a sharp increase in the tax burden.
Additionally, a simplified VAT payment mechanism is planned for the catering, trade, and services sectors. Businesses will be offered a choice: pay VAT at a 6% rate without income tax or remain on the current system. This approach should simplify calculations and reduce administrative pressure.
Special attention is paid to VAT administration problems. Today, companies switching to this tax face a sharp increase in reporting, and most errors occur precisely in this category of taxpayers. In response, it is proposed to automate VAT refunds for conscientious entrepreneurs, abandon the practice of temporarily blocking VAT payer status, and simplify a number of procedures, including opening bank accounts.
It is also planned to soften control measures: businesses will be given the opportunity to correct errors independently, and inspections will be limited — tax audits will not be conducted for risks up to 500 million soums, and field inspections for risks up to 100 million soums.
Relaxations will also affect the service sector: permission to sell alcohol and tobacco products for cash, cancellation of requirements for the share of non-cash revenue for partial VAT refund, and simplification of employee registration are being discussed.
The new measures are expected to open opportunities for legal growth for more than 600,000 entrepreneurs. Due to increased transparency, additional budget revenues of at least 2 trillion soums annually are forecast.
The initiatives were supported by the president, and their implementation was ordered to be accelerated with an emphasis on fair conditions and digitalization of the tax system.
Source: podrobno.uz