Transcript The tax system of the Republic of Uzbekistan

The tax system of
the Republic of
Uzbekistan
The plan:
1. Features of the functioning of the tax
system of Uzbekistan before
independence
2. I stage of economic reforms of the tax
system (1992-1994 gg.)
3. ll stage of economic reforms of the tax
system (1995-1997 gg.)
4. Ill stage of economic reforms of the tax
system (1997-2007 gg.)
1. Taxes in force in 1991 so. were a
step ahead of the withdrawal of
voluntarist profits that occurred before
1988, and in comparison with the
normative method of profit distribution,
flattened in 1988-1990. At the same
time, they have been subjected to fair
criticism and needed to be improved.
Since income tax was levied on the various and
varying rates throughout the year. Tax incentives
do not promote important - investment in
expanded reproduction based on the
reconstruction and technical re-equipment, the
introduction of modern technology. VAT in the
transition to a market economy has become an
inhibiting factor. Finally, the sales tax was
introduced so poorly without any preparation,
including those without the awareness of the
population. Rate of progressive personal income
tax, introduced in the second half of 1990 did not
meet the real economic conditions. These four tax
provides the largest mass budget revenues at all
levels in 1991.
2. The changed political and economic
conditions in Uzbekistan, the
acquisition of the sovereignty
necessitated the concentration in the
hands of the state considerable
financial resources. State budget in
1992 for the first time had formed
without subsidies.
In the first stage of economic reform the tax
system was oriented to fulfill the fiscal problems,
the main aim of which was to provide a better
balance of the budget. She had to deal with in a
recession and, accordingly, reduce the tax base
of extreme tension in the area of public finance.
This period is characterized by a multiplicity of
taxes and their high rates.
The most important result of the tax reform of
this period was the introduction of value added
tax instead of sales tax and the sales tax.
A significant part of the income of enterprises could
be used for the formation of the wage fund, which
consequently would reduce the tax base. Therefore, at
the initial stage was a tax on income, which serves as
a tool to mobilize the necessary funds in the budget.
Fiscal approach to tax policy was implemented
through the establishment of relatively high rates of
tax on income. Tax rate on income were differentiated
by sector and ranged from 15 to 45%.
In 1992, he introduced a tax on property and other
resource taxes paid by both legal and natural persons.
Approach to the collection of personal income tax has
also changed. He was calculated based on the gross
annual income.
Trust funds have been apart of social-budget
funds allocated to them with an independent
source of income, which corresponds to the
current practice in many developed countries.
Market reforms in the economy lead to an
evolutionary reform of the tax system, that is, the
introduction of the tax system of specific
adjustments taking place in the economy of the
relevant processes. Based on the task of
strengthening of the state budget, reduce the
deficit, in 1993, the tax system included
substantial adjustments. In particular, a number of
new taxes - resource payments and payment for
water
The negative results of the legislative process on
taxes specific to phase I of reforming the tax
system were to:
-First, the fiscal approach to tax policy was
implemented through the establishment of high
tax rates in the presence of a large number of
benefits provided:
-Secondly, the tax system does not perform its
essential function, the stimulation of production
and producers. Practice shows that the exemption
from taxes of up to 30 percent of the income of the
enterprise leads to a reduction in their own
savings and investments. If taxes exceed 40-50
percent of revenue, it leads to the freezing of
investment and reduce production.
-third, the uneven distribution of the
tax burden among the various
categories of taxpayers. The brunt
of the tax burden fell on business
income at a relatively low level of
taxation of natural resources and
raw materials, property and
personal income, which in the total
budget is insignificant share.
-Fourth, not effectively worked
pereraspredilitelnaya the tax system. Was not
formed an optimal scheme distinguish between
different types of taxes to national and local
taxes for securing budgets at various levels.
This led to the fact that through the national
budget redistributed substantial amount of tax
revenue. Created counter financial flows,
complicating the financial system as a whole.
-Fifth, in force at the first stage of the tax
system does not meet the changing economic
environment and its tasks - economic
stabilization and structural adjustment of the
economy.
3. Since 1995, the tax system to a
certain extent been unified. Were
canceled several inefficient taxes:
tax on raw materials that are exported
from the Republic;
income tax on the forest;
withdrawal of the budget, 20 percent
of accumulated depreciation.
It should be noted change in the
mechanism of collection of property
tax and the vehicle owner * means.
Prior to 1993, served as a source of
payment of producers' profits, since
1993, they are included in the cost of
production, which has affected not
only the rise in prices, but also distort
their economic substance.
One of the negative factors that had a negative
impact on the financial and economic
activities of companies, was the introduction
of new charges - 30-percent depreciation and
resource payments, which caused a
significant loss of industrial enterprises as
well as fixed assets are concentrated mainly
in industry, and the largest part in the the cost
of production of industrial enterprises are
material resources.
Given the negative consequences of the
actions of individual taxes, as mentioned
above, the beginning of 1994 was marked
by several attempts by the state to correct
the situation:
resource payments were canceled;
the mandatory payment of amortization
was reduced from 30 to 20 percent;
narrowed the tax base for property tax - a
tax was levied only on the value of fixed
assets;
a tax on the income of agricultural
enterprises;
revised methodology and the excise
tax;
provided for a phased transition to
income declaration by all categories of
the population with income from
business activities.
Negative role, both in terms of creating
a favorable climate for foreign
investment, and to expand foreign trade
enterprises of the republic, played a tax
proceeds in foreign currency, which was
introduced in May 1993, and 35 percent
of the anticipated withdrawal of foreign
exchange earnings derived enterprises
Priority for Foreign Economic Activity of
Uzbekistan had to create the necessary
legal, social, economic and other
conditions for the involvement in the
economy of foreign investment, and
promoting joint ventures, as well as
protecting the interests of investors.
Adopted in September 1994, the Law of the
Republic of Uzbekistan on the Amendments to
the Law of the Republic of Uzbekistan "On
income tax from the citizens of the Republic of
Uzbekistan, foreign citizens and stateless
persons" did not correct the deficiencies of the
existing mechanism of taxation of natural
persons. Changes made to the scale of corporate
income tax, amounted to an increase in tax rates,
except for the minimum rate of 5%. In addition, a
reduced range of the first group of income,
subject to a minimum rate of 15%. All this has led
to an increase in the tax burden for many
taxpayers.
The evolution of the corporate tax and
personal income tax goes in two directions.
First, reduced the tax burden on businesses
and the second - a stimulating effect of
taxes is through the use of various types of
tax incentives.
Changing the structure of the state budget
for 1992 -1996 years. a direct result of
ongoing changes in these years, the tax
system of the country.
Reforming the tax system in 1997, was continued
on the basis of the existing concept of tax policy
aimed at reducing the tax burden on legal
entities, increased incentive effects of taxes,
strengthen the revenue side of the budget
through taxes on natural resources and property.
The main characteristics of the existing tax
system at present are:
In the reform of direct taxation:
Since 1997, the income tax rate was
reduced from 37% to 36%. In order to
encourage and support enterprises,
specializing in the production of goods
for children, crafts and toys,
enterprises of "Uzselmashholding",
they are set to lower income tax rates.
In order to develop and strengthen the technological
base of the banking system exempt until the end of
1997 banks from paying taxes on income, property,
land, vehicle owners, with the channeling of funds in
the amount of 70% from the amount on the
development of the banking system.
Certain benefits are social in nature and are provided
to enterprises employing persons with disabilities and
students.
Income tax on individuals did not undergo significant
changes. The current scale of 1996 corporate income
tax, in spite of all the negative consequences to which
it leads, stored for 1997 unchanged.
In the reform of indirect taxation:
Reforming the system of indirect
taxation was aimed at expanding the
tax base, as indirect taxes in the
current conditions are the most stable
sources and change the rates and
bases of taxation of these taxes
immediately leads to a corresponding
change in revenue.
On value-added tax introduced
differentiated rates: for food staples (flour,
bread, milk, meat) rate was reduced to
10% and the basic rate, in order to
compensate for the loss of the budget has
been increased from 17% to 18%.
Excise tax broadened the tax base by
imported products (complex appliances,
rugs, beer, sweets, jewelery, soft drinks
and juices).
Changes in resource taxes and property taxes
are made on the basis of the need to index them
in line with inflation, as the rate of these taxes are
set in absolute terms. Land tax rates, water
charges, tax on vehicle owners to individuals
increased by 1.5 times.
In 1997, a tax on the environment. The tax rate
on the environment is set at one percent of the
production cost of production. Such a broad base
of taxation is that tax in 1997 will put it to the level
of property tax and other resource taxes on its
value in the formation of budget revenues.
In order to unify the tax system have been
combined taxes that have the same tax
base.
For small companies introduced a
simplified system of taxation. Instead of all
the previously existing tax is set with a
single tax revenues.
Income tax, VAT and excise taxes remain
the main, through which planned to
generate about 58% of the state budget. In
this case, the income tax rate was reduced
from 37% to 36%.
Funds earmarked extra-budgetary funds:
Pension Fund Special Account GKI.
Employment Fund and the National Road Fund
in 1997, consolidated in the state budget while
maintaining the focus of their target for overall.
In 1997, the country adopted the Tax Code.
Almost tax system proposed in the tax code, is
based on current tax in 1997 and the
mechanism of their action, and absorbed all the
negative aspects of their operation.
In the Tax Code for tax business income tax
base, there are three: gross income, revenue
and profits.
In the Tax Code preserves all existing VAT
exemption.
Active and laid in 11azogovom Code
mechanism of charging VAT on fixed assets
does not meet the market conditions of
management and does not include the effects
of inflation. VAT paid by the consumer in the
price of property, recovered through
depreciation. However, the company will
recover through depreciation fully paid VAT
only after depreciation.
In market economies, a tax on real estate, the basis of
taxation which is land, buildings. In Uzbekistan, as
already noted, there are two tax similar to this: - a
tax on property and land.
At present the country is conducted cadastral
valuation of land. This makes it possible to change
the approaches to the taxation of property and land,
in particular instead of property tax and a tax on land
property, combining these taxes. This will reduce the
amount of taxes paid by the taxpayers, and will
contribute to a simplification of the taxation system
and tax calculations.
There are some problems with the tax on
mineral resources. In calculating the tax base of
taxation includes volumes of mining and
underground structures, which distorts the
economic substance of the tax. Tax on mineral
resources must pay only those enterprises that
produce minerals virtually tax bowels - royalties,
ie payment for the right of subsoil use in the
mining and processing of man-made structures.
At the heart of the third stage of development
of the tax system are set by the President and
the Government of the problem of liberalization
of all aspects of society, moving forward on the
path of economic reform.
Changes made to the legislation, aimed at further
reducing the tax burden, simplifying the tax
system for small and medium businesses,
better protection of honest taxpayers from
undue interference in their business activities,
the liberalization of the criminal and
administrative penalties, at a full realization of
an efficient tax system.