On November 26, Deputy Prime Minister and Minister of Economy and Finance Jamshid Kuchkarov commented on plans to abolish tax privileges for exporters during a session of the Legislative Chamber of the Oliy Majlis, as reported by “Gazeta.uz”.
Since 2019, the taxable base for profit tax has been reduced concerning the profits derived from the sale of goods and services for export, and for the single tax payment—regarding the volume of goods sold for export. The draft state budget law for 2025, currently under review by the Oliy Majlis, includes the cancellation of these provisions.
As noted by the Deputy Head of the Ministry of Investment and Foreign Trade, Khurram Teshabaev, the president instructed in a June decree to eliminate the tax benefits for profit and turnover for exporters. The abandonment of these benefits is stipulated by the WTO agreement on subsidies and compensatory measures.
Teshabaev acknowledged that the tax relief "contributed to the expansion of export geography" and stimulated its quantitative increase. The cancellation of this relief may result in certain consequences, the official pointed out.
Specifically, the reduction in working capital resulting from this step may lead to a decrease in export volumes. To mitigate the impact and meet the demand for working capital, measures will be taken—such as the development of factoring services.
According to Kuchkarov, thanks to the tax privileges on profit, exporters retained 972 billion soms in 2022 and 1.1 trillion soms in 2023. The volume of turnover tax benefits amounted to 12 billion and 14 billion soms, respectively.
“I would like to express my opinion: the WTO is, in general, a fair trading system. There is inequality between countries that are WTO members and those that are not. If we trade with a developed country, it has the right to demand favorable conditions for itself; I do not mean any privileges,” said the Deputy Prime Minister.
Currently, some WTO member countries have imposed import duties on Uzbekistan that are not applied to other nations. Kuchkarov noted that the republic's participation in the organization would prevent other states from unilaterally restricting exports.
As anticipated by the government, joining the WTO will allow Uzbekistan to trade with foreign markets on equal and fair terms. Since most countries in the world are part of the organization, Uzbekistan must also become a member for equitable trade with them.
“Some may suffer losses, but in my view, the WTO is a system of fair trading principles. Therefore, every Uzbek entrepreneur must learn to operate under conditions of fair and open competition,” Kuchkarov emphasized.
Joining the WTO
In April 2023, Shavkat Mirziyoyev instructed the government to expedite the process of Uzbekistan's membership in the WTO. The head of state highlighted the importance of this step for significantly increasing exports—particularly of finished products.
In the summer of the same year, the position of special representative of the president on WTO issues was established, and it was also mandated to create units in 20 ministries to interact with the organization. Additionally, the president imposed a ban on creating regulatory legal acts that do not comply with the organization's norms.
At the 78th session of the UN General Assembly in September 2023, the president stated that the swift accession to the WTO is a priority task for Uzbekistan. The Director-General of the organization, Ngozi Okonjo-Iweala, agreed to expedite the next meeting of the working group on this matter.
Uzbekistan plans to join the WTO before the 14th Ministerial Conference, which will take place in 2026 in Cameroon. During an open dialogue with businesses in August of this year, Mirziyoyev described joining the WTO as “an integral part of reforms.”
Twenty-one countries—France, Italy, the USA, Israel, and others—have expressed support for Uzbekistan's accession to the WTO. Negotiations on this issue are currently underway with Russia, the UK, China, and several other countries.
Earlier, Spot reported that the president proposed establishing a parliamentary commission to harmonize Uzbekistan's laws with WTO norms.