Uzbekistan to Lower Taxes in 2013
Saturday 10 November 2012
(Tax-News.com) – The Uzbek government has decided to lower taxes slightly for citizens in 2013 after high tax collections this year, a tax news agency reported Friday.
As a result, personal income tax rates will drop from 9% to 8%, while minimum wage levels will be increased. The drop in personal income tax rates is expected to cost the Uzbek government $94.9 million. In 2012, the country recorded a 29.1% increase in tax revenues from small businesses, and a 21.3% increase in personal income tax revenues.
Currently, Uzbekistan’s income tax system has progressive rates from 9% to 22%. Taxable incomes include wages and salaries, while some incomes are non-taxable such as healthcare benefits, inheritances, insurance premiums and repayments or income from the sale of patents.
The top rate for income taxes is 22%, applicable only on incomes which figure at ten times that of the country’s minimum wage.
Resident individuals are taxable on worldwide income, while non-residents are taxed only on income received in Uzbekistan.
In a nod to business development, in 2013, patents, software, copyrights, and licenses will all be tax-free.
The IMF recommends Uzbek authorities to continue to pursue a prudent fiscal policy by saving revenue over-performance and cutting non-priority spending. Going forward, further tax cuts should be accompanied by measures to broaden the tax base and prevent decline of revenues. Avoiding a fiscal expansion is needed to reduce inflationary pressures. On the expenditure side, the authorities should focus on improving social safety nets and targeted support to the low-income population.