February 19, 2007.
TASHKENT. A seminar on the "Ways to raise the efficiency of tax and other forms of economic benefits" was held at the Tax Academy of the State Tax Committee of Uzbekistan. The meeting was organized by the Senate Committee for Budget Issues and Economic Reforms, UzA reported.
During the period from 2000 to 2007 the income tax rate in Uzbekistan was reduced from 38% to 10%, the single social tax payment – from 40% to 24%, and the single tax for small business entities – down to 10%. In 2007 the tax benefits provided to business entities in Uzbekistan substantially increased their financial resources.
Seminar participants noted the importance of the reduction of tax burden on business entities which would help raise the efficiency and competitiveness of the economy. Thus, in 2008 the single tax payment for micro-firms and small enterprises will be reduced from 10% to 8%, which will create favourable conditions for the fast development of small business and private enterprise.
The reduction of the tax rate for commercial banks from 17% to 15% with targeted use of the saved funds for raising the bank's capitalization level will help strengthen their financial condition and expand banks' participation in the investment processes, structural reforms and modernization of the economy.
Commercial banks are also extending soft micro-loans for the formation of initial capital by new micro-firms, small enterprises, and farms. For the purpose of supporting the development of micro-firms, family businesses and home-based labour the MIcroCredit Joint-Stock Commercial Bank provides soft micro-leasing services.
In order to ensure the competitiveness of the local producers, the excise tax on furniture, crystal-ware, video and audio equipment produced in the country has been canceled. The customs procedures are being simplified through the introduction of the single order of payment of customs duties for all business entities participating in foreign economic activity, as well as introduction of zero tax rate on value added on the imported wooden materials for legal entities.
Along with this the participants of the seminar noted the need to raise the efficiency of the explanatory work in these priority areas, particularly in the regions, among entrepreneurs and staff. Entrepreneurs are often unaware of the advantages and importance of the reduction of tax burden and the use of financial-economic benefits is limited to mere redistribution of the funds saved on tax exemptions for the internal needs instead of being purposefully directed as investments or used for strengthening the business's competitiveness. There is still a need to develop a mechanism for monitoring the impact of the benefits and evaluation of the efficiency of tax and other economic benefits.
Forum participants made suggestions on improving the efficiency and purposefulness of the use of financial-economic benefits and strengthening their motivating power in implementation of the business development projects. They also noted the need to introduce changes and additions to the appropriate legislative acts.
Among the participants of ht eseminar were senators, representatives of the ministries of finance, economy, justice, labour and social protection of population, State Customs and State Tax Committees, State Property Committee, State Demonopolisation Committee, Higher Economic Court, Central bank, Chamber of Industry and Commerce, Institute for Monitoring the Active Legislation under the President of the Republic of Uzbekistan, scientists, experts, entrepreneurs and media.
Source: Business Information Portal "UzReport.com" ( available at: www.uzreport.com )
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