The Institute for Reducing the Share of the Shadow Economy, Improving Tax and Customs Administration, and Fiscal Analysis at the Ministry of Economy and Finance has put forward an initiative to begin preparations for introducing a carbon tax for large production facilities in Uzbekistan. This proposal was presented on July 30 during the 'Fiscal Dialogue' event.
According to the institute's plan, the preparatory stage should take place throughout 2027. This period will include tasks such as inventorying emissions, determining rates, selecting the tax base, and establishing the circle of companies that will be taxpayers.
The carbon tax itself is scheduled to be introduced in 2028, starting with the largest emitters. Subsequently, its application could potentially be extended to other enterprises. Two options are considered as the basis for calculating the tax: either the actual volume of carbon dioxide emissions or the volume of carbon fuel consumed.
It is planned that between 2029 and 2030, the tax rates will gradually increase according to a pre-approved schedule, although the exact parameters are currently under development. The fiscal effect of introducing the tax is expected to appear as early as 2028.
Institute experts believe that introducing this tax will allow the cost of emissions to be accounted for in the overall expenses of enterprises. This, in turn, should motivate companies to work on improving energy efficiency and reducing pollution levels.
Another important motive is the need to comply with international carbon regulation standards. Implementing internal pricing for emissions can minimize the likelihood that exporters from Uzbekistan will face the need to pay carbon levies outside the country.
It is important to note that this proposal is purely analytical and is not yet an approved legislative act or bill. Previously, in 2020, the publication 'Gazeta' covered international experience in carbon taxation. The essence of such a tax is to make pollution economically unviable: the more fuel consumed by both private households and companies, and the higher their emissions, the more they pay. Those who achieve emission reductions and improve energy efficiency do not incur such high costs.
An example from international experience is Canada, where the carbon tax was integrated into the cost of gasoline, natural gas, and other types of fuel. Furthermore, most of the collected funds were returned to citizens or used to subsidize energy-saving measures. This model is designed to encourage those who pollute less and increase the financial burden on large fuel consumers.
A recent achievement was Uzbekistan receiving the world's first payment from the World Bank for confirmed reduction of carbon dioxide emissions in June 2024. A grant of $7.5 million was transferred for a reduction of 500 thousand tons, which could potentially increase to $20 million. This payment was made under the iCRAFT project, which aims to improve energy efficiency, reduce state subsidies on energy, and develop carbon financing mechanisms. Part of these funds is planned to support families most affected by rising gas and electricity tariffs.
Previously, the World Bank indicated that Uzbekistan could effectively use carbon pricing, whether through introducing an emissions tax or through quota trading, to finance the transition to 'green' technologies and stimulate enterprises to reduce pollution levels.
The Institute for Reducing the Share of the Shadow Economy, Improving Tax and Customs Administration, and Fiscal Analysis at the Ministry of Economy and Finance has put forward an initiative to unify the approach to paying the social tax for individual entrepreneurs (IEs) and self-employed individuals in Uzbekistan. This idea was presented during a fiscal dialogue on July 30th.
Currently, both categories use the same basic calculation unit (BCU) of 412 thousand soms, which will increase to 440 thousand soms starting September 1st. However, the frequency of payments differs.
According to Part 1 of Article 408 of the Tax Code, IEs are obliged to pay the social tax monthly in an amount of no less than one BCU, equivalent to 5.28 million soms per year. Self-employed individuals, according to Part 2 of the same article, have the option to voluntarily pay 1 BCU per year to count this period towards their employment record. After the BCU increase, their annual payment will be 440 thousand soms, which is approximately 36.7 thousand soms per month.
The presentation noted that the financial burden on an individual entrepreneur is twelve times higher than the burden on a self-employed person. This difference is partly due to the fact that IEs, unlike self-employed individuals, can hire up to five employees and conduct retail trade, giving them a broader scope of activity and additional opportunities.
The Institute recommends abandoning the existence of two parallel systems with significant differences in payment amounts and transitioning to a single category of self-employed individuals. International experience is cited as a reference, where contributions are usually tied to declared income or minimum wage.
The proposal is to calculate the minimum social tax based on the minimum wage (MW) rather than the BCU. Applying the basic rate of the social tax established by Article 405 of the Tax Code to an MW of 1.36 million soms would result in a monthly payment of 163.2 thousand soms, or almost 1.96 million soms per year.
At the same time, the proposed amount would be approximately 4.45 times higher than the current voluntary payment of self-employed individuals (about 36.7 thousand soms per month), but it would be 2.7 times less than the minimum payment that IEs would have to make after the BCU increase.
The Institute does not insist on introducing a one-time targeted payment. Instead, it proposes starting with a monthly contribution of about 50 thousand soms, followed by a gradual increase to 163.2 thousand soms according to an approved schedule.
It is important to note that this initiative represents an analytical proposal from the Institute and does not yet have the status of an adopted legislative act or bill.
As of July 1, 2026, 375.1 thousand individual entrepreneurs were registered in the country. The number of self-employed individuals varies across sources—from 2.8 million to 5.5 million.
Economist Otabek Bakirov stated that the principle of equality when revising the social tax should apply not only to IEs and self-employed individuals but also to enterprises that benefit from 1% preferential or reduced rates. He suggested considering the introduction of a minimum mandatory payment for such beneficiaries, similar to the procedure for paying land tax and property tax by some exempted legal entities. Bakirov emphasized: 'Strength becomes justice only when it is applied equally not only to the weak and small, but also to the strong and large. Only then does trust in such justice appear.'
Furthermore, it was learned in mid-July that the authorities plan to make pension contributions mandatory for self-employed individuals. Currently, 2.8 million self-employed individuals are registered in Uzbekistan, but only about 800 thousand people, or 30%, voluntarily make the corresponding contributions. The existing system allows a self-employed person to pay one BCU—412 thousand soms—and receive one year of service for pension purposes.
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.
