The Institute for Reducing the Shadow Economy, Improving Tax and Customs Administration, and Fiscal Analysis at the Ministry of Economy and Finance of Uzbekistan has put forward a proposal to reduce the corporate income tax rate for certain organizations from 20% to 15%, as well as to revise the system of taxing financial services. This proposal was presented during a fiscal dialogue on July 30th.
According to the information presented, the reduced corporate income tax rate should apply to banks, mobile operators, producers of polyethylene granules, markets, and shopping centers. Implementing this proposal will require amendments to Article 337 of the Tax Code.
The Institute calculated that lowering the tax rate would lead to a decrease in budget revenues by 859 billion soums. To cover this deficit, it was proposed to introduce Value Added Tax (VAT) on fee-based financial services.
The proposed model involves separating financial income into commission income and interest income. Under this proposal, fixed fees for financial services will be subject to VAT, while interest (margin) income will remain exempt from taxation.
VAT will be applied to services for which fixed payments are charged. Such services include account and bank card maintenance, cash settlement services, acquiring and payment acceptance, commissions on bank guarantees, sureties, and letters of credit, foreign currency commission services, processing of bank card transactions, depositary, registration, and stock exchange services, payment system fees, as well as the service component of factoring and forfaiting.
The proposal maintains the VAT exemption for services whose charges are not specified separately. These include deposit attraction, provision of loans and credits, interest on loans, repurchase agreement (repo) transactions, the interest portion of financial leasing, the discount portion of factoring and forfaiting, operations with stocks, shares, securities, and derivatives, as well as assignment of creditors' claims.
The presentation noted that the proposed approach aligns with international practice. Recommendations from the International Monetary Fund and the Organisation for Economic Co-operation and Development were cited as justification, stating that fee-based financial services are subject to VAT, while interest (margin) income remains exempt from such taxation.
A proposal has been put forward in Uzbekistan to introduce an excise tax on imported palm oil. This initiative was presented by the Institute for Reducing the Shadow Economy, Improving Tax and Customs Administration, and Fiscal Analysis under the Ministry of Economy and Finance. The proposal was voiced on July 30 during a fiscal dialogue.
The Institute suggests setting a specific excise rate of 139 US dollars per ton, equivalent to approximately 1.7 million soums. The initiative's authors calculated that this rate would account for about 10% of the average cost of importing palm oil in 2026, which is estimated at 1388 US dollars or 16.93 million soums per ton.
According to calculations, with an annual import volume of 12.8 thousand tons, the introduction of the new excise tax could supplement the state budget with approximately 21.7 billion soums in additional revenue.
The developers justify this initiative by stating that the market price of palm oil does not reflect the social costs associated with its consumption, including healthcare expenses. The presentation notes that in economic theory, such taxes are considered a tool for accounting for negative externalities.
The authors also believe that consumers are not always aware of the potential risks associated with consuming products high in saturated fats. Since palm oil is often used in processed food ingredients, the institute believes that labeling is insufficient, and pricing mechanisms can serve as an additional means of regulating consumption.
The presentation cites recommendations from the World Health Organization, outlined in its 2016 report 'Fiscal Policy for Diet and Prevention of Noncommunicable Diseases,' according to which taxing foods high in saturated fats can be considered a measure to prevent noncommunicable diseases. Furthermore, the authors refer to the World Bank's position that such excises can simultaneously influence consumption patterns and provide additional budgetary revenues.
The Institute also points out that current tax benefits and zero rates create a price advantage for certain types of fats compared to alternative products. The developers believe that introducing an excise tax will help partially eliminate this imbalance. The materials from the event where the proposal was presented for discussion within the framework of the fiscal dialogue did not contain information regarding a decision on its implementation.
The Ministry of Economy and Finance of Uzbekistan has presented proposals for a comprehensive reform of the national pension system. The goal of these measures is to enhance the financial sustainability of the system and reduce the Pension Fund's dependence on transfers from the state budget. These proposals are included in the Fiscal Strategy for the period 2027–2029.
The Ministry noted that rising pension expenditures and a limited income base for the Pension Fund create increasing pressure on the state budget. In 2024, the Pension Fund's expenses amounted to 64 trillion soums, equivalent to 4.2% of GDP, and in 2025, they are projected to rise to 76.7 trillion soums, maintaining the same share of the economy. During the same period, budgetary transfers increased from 16.3 trillion soums to 20.2 trillion soums.
For 2026, the fund's revenue is approved at 64.7 trillion soums, while projected expenses will be 86.1 trillion soums, accounting for 4.1% of GDP. Additional transfers amounting to 23 trillion soums have been allocated from the republican budget to cover the deficit. The Ministry warns that without reforms, the pension system will continue to rely on budget financing throughout the 2027–2029 period. The main reasons cited for this dependence are the high level of informal employment and existing social tax benefits for certain categories of legal entities.
One of the key proposals is to expand the number of social tax payers. It is planned to gradually introduce mandatory payments of social tax for registered self-employed citizens who are currently exempt. There are 2.8 million registered self-employed citizens in Uzbekistan, about 800,000 of whom make voluntary contributions. Furthermore, the ministry suggests allowing citizens with official income to voluntarily pay social tax for unemployed family members to help them accumulate pension rights.
The Ministry also proposes to gradually limit new social tax benefits and abolish existing preferences. According to Deputy Minister of Economy and Finance Otabek Fozilkharimov, over 65,000 enterprises benefited from such benefits in 2025, totaling 3.2 trillion soums. Another group of proposals concerns adjusting the pension calculation methodology. It is proposed to more closely link pension payments to the amount of social tax paid, as well as extend the earning period used for pension calculations and gradually revise the current upper income limit considered in pension calculations.
The strategy also provides for simplifying the verification of employment records for periods when complete electronic data is unavailable, aiming to reduce the administrative burden on citizens. Another initiative calls for a gradual increase in the minimum work experience required to receive a pension, as the Ministry believes that current requirements do not sufficiently stimulate formal employment. Although the strategy does not specify the proposed new thresholds, the Ministry places great emphasis on developing the funded pension system. To increase attractiveness, it proposes introducing a mechanism of state co-financing of pension savings for low-income citizens. Under the proposed model, if a citizen whose monthly income does not exceed 7.6 million soums contributes 5% of their income to the funded pension, the government will add another 2.5%.
The Ministry is also considering implementing an 'exclusion' mechanism to encourage the declaration of higher official incomes, although the details of its implementation have not yet been disclosed. Additionally, the ministry proposes gradually giving citizens the opportunity to participate in managing their own pension savings, which, in their opinion, will increase system transparency and strengthen public trust. The Ministry of Economy and Finance expects that the proposed measures will broaden the coverage of the pension system, strengthen incentives for formal employment and income declaration, improve the financial sustainability of the Pension Fund, and gradually reduce its dependence on the state budget.
The Cabinet of Ministers of Uzbekistan has approved changes to the procedure for returning a portion of the value-added tax (Tax Free) to foreign citizens for goods purchased in the country. The relevant resolution dated July 16, 2026, was published on the legal portal Lex.uz.
The amendments provide for a relaxation of requirements for receiving VAT refunds. Specifically, the minimum total purchase amount required to apply for Tax Free has been reduced from 1 million to 300,000 soums.
Furthermore, the list of goods subject to the VAT refund system has been significantly expanded. Almost all categories of goods are now eligible for the cashback system, with the exception of meat and meat by-products, fish and seafood, animal products, vegetables, fruits, nuts, coffee, tea, spices, cereals, flour, and baked goods, animal and vegetable fats, meat, fish, and other aquatic invertebrates products, sugar and confectionery made from sugar, cocoa, processed vegetable, fruit, nut, and other plant products, as well as other food products.
The fund transfer procedure has also been changed. VAT refunds will now be credited to the foreign citizen's bank card or account within three working days. Previously, payments were made through the general mechanism of the tax cashback system—after the 25th day of the month following the month of refund registration.
The new rules also introduce the possibility of receiving the refund in cash in US dollars upon leaving Uzbekistan. In this case, the foreign citizen will be paid 85% of the tax amount, and the remaining 15% will constitute the operator's commission for the Soliq Servis system. Cash payments are made on the day of the foreigner's confirmed departure from the country, and the system operator maintains separate records of persons entitled to this method of receipt.
The reform of the Tax Free system was initiated by a decree of the President of Uzbekistan, signed in March of this year. This document provides for reducing VAT refund periods and introducing a mechanism for receiving cash payments.
