INFORMATION DIGEST OF PRESS OF UZBEKISTAN # 153

August 7, 2017

POLITICS
Ensuring sustainable development of the economy – an important factor of improving the well-being of the population

ECONOMY
Economy of Uzbekistan grows by 7% in 1H

BUSINESS CLIMATE
Uzbekistan: Tax Policy and Social Issues

SOCIETY
Uzbek citizens, injured in road accidents in Kyrgyzstan, return to Tashkent

POLITICS

Ensuring sustainable development of the economy – an important factor of improving the well-being of the population
On August 4, 2017, a videoconference under the chairmanship of the President of the Republic of Uzbekistan Shavkat Mirziyoyev was held. It was dedicated to implementation of major and significant investment projects included in the Investment program for 2017, expected outcomes on the results of the current year, as well as execution of tasks identified during the trips of the head of our state to Andijan region and Chilanzar district of the city of Tashkent.
The meeting was attended by the Prime Minister and his deputies, State advisers to the President, heads of relevant ministries, departments and economic associations. The meeting was also attended by the Chairman of the Jokargy Kenes of the Republic of Karakalpakstan, khokims of the regions and the city of Tashkent, heads of local khokimiyats, territorial structures of ministries and departments, enterprises, entrepreneurs and investors through a videoconference.
The head of our state noted that ensuring the progressive growth of investments from year to year, introduction of new modern enterprises on production of products with high added value on the basis of deep processing are one of the most important factors for ensuring sustainable development of the economy of our country, first of all, further improvement of living standards and welfare of the population.
Organization of the National project management agency under the President once again showed that the issue of attracting investments in our economy is of great strategic importance. At the meeting, the need for a qualitative organization of activities of this agency, focusing primarily on improving the effectiveness of activities on development and implementation of investment projects, ensuring transparency of all related processes was noted.
In accordance with the Investment program for 2017, it is envisaged to master 7,2 billion US dollars within 552 projects and implement 67 major projects this year. In particular, 170 projects will be completed this year, including 16 large projects worth 2,4 billion dollars.
Implementation of 32 projects have been completed as the result of consistent continuation of active investment policy over the past 7 months, all necessary measures have been taken on completion of 138 projects and commissioning of relevant facilities by the end of the year.
The President of our country drew attention to the fact that some heads at the republican level and at places are superficially and irresponsibly concerned with issues of promptly eliminating problems that arise in the process of implementing investment projects, as well as providing them with guaranteed sources of financing.
Over the past 7 months, the timeframe for the disbursement of funds on 27 projects has been delayed, and the required package of documents has still not been approved on 8 projects.
In this regard, the heads of industries and project initiators are assigned specific tasks on quickly solving the existing problems and eliminating passive cases.
The head of our state noted that the reason of major shortcomings that arise in implementation of investment projects is in lack of well-developed documentation, many managers do not have a vision for specific future of relevant industries and spheres based on accurate calculations of their development with a view to several years in advance.
Deputy Prime ministers, heads of ministries and departments, economic associations and khokimiyats were instructed to strengthen weekly monitoring of implementation of investment projects, and monthly report on specific measures taken to eliminate the identified problems and assess activities of responsible persons who have committed shortcomings.
Another problem is the lack of a system of analyzing the state of new facilities’ operation after the adoption of a relevant document on the launch of objects within the framework of investment projects. In this regard, the head of our state instructed the Ministry of economy to develop the procedure for monitoring activities of new commissioned objects jointly with relevant ministries and departments.
At the meeting, the Ministry of economy, the State committee on investments, the Ministry of finance were instructed, together with large economic associations and local khokimiyats, to include in the Investment program for 2018 only those projects for which project documents were prepared and the cost is at least 5 million dollars, develop specific proposals on granting investors the tax privileges and other preferences for stimulating their participation with their projects in the Investment program.
It was noted that special attention should be given to including only deeply thought out investment projects with ready project-estimate documentation and specific sources of financing in the Investment program for 2018.
Administration of the State committee on investments was instructed to identify specific areas of working with foreign investors on the basis of principles of equal partnership and mutual interest, as well as accelerate development of separate procedures on the systematic and timely consideration of import contracts, issuance of conclusions on them.
It was also noted that it is necessary to critically analyze activities of a number of intergovernmental commissions formed for the development of cooperation of Uzbekistan with foreign countries, to increase the effectiveness of their activities.
At the meeting, implementation of protocols and programs adopted on the basis of visits of the head of our state to Andijan region on June 2-3 and Chilanzar district of the city of Tashkent on April 12 of this year was considered.
It was noted that a new monitoring system will be introduced under the President of the Republic of Uzbekistan on phased consideration of the current state of implementation of these protocols and programs, hearing and evaluating the reports of executors.
The Prime Minister of the Republic of Uzbekistan and his deputies were given specific instructions on systematic study of the execution of tasks indicated on socio-economic development of Andijan region and Chilanzar district, all regions of the country, consideration of all problematic issues without exception.
At the meeting, reports and proposals of the heads of complexes of the Cabinet of Ministers, ministries, departments, companies, associations and khokims were heard and discussed, relevant decisions were made on accelerating implementation of investment projects and solving existing problems.
(Source: UzA)

ECONOMY

Economy of Uzbekistan grows by 7% in 1H
Gross domestic product (GDP) of Uzbekistan grew by 7% year-on-year in the first half of 2017 to over 102.7 trillion soums.
According to the State Statistics Committee of Uzbekistan, the volume of industrial production in January-June of 2017 made up 64.99 trillion soums, which rose by 7.6% compared to the same period in 2016 (currency rates of CB RU from 07.08.2017, 1$= 4098.37 soums).
The volume of production of agriculture, forestry and fishery increased by 5.8% in the reporting period - to 24.05 trillion soums.
In the first half of 2017, Uzbekistan used investments into fixed capital for 26.6 trillion soums, which is 8.3% higher than in January-June 2016.
In the reporting period, construction work in Uzbekistan reached 16.31 trillion soums. The growth compared to the same period in 2016 was 8.7%.
Retail trade turnover increased by 11.1% in January-June of 2017 and reached 49.75 trillion soums. The volume of provided services hit 48.83 trillion soums, which is 11.6% more compared to the same period in 2016.
Over the six months of 2017, cargo turnover reached 41.9 billion tons-km (+ 2.9%) and passenger turnover - 53.3 billion pass-km (+ 5.2%).
(Source: UzDaily.com)

BUSINESS CLIMATE

Uzbekistan: Tax Policy and Social Issues
One of the most important conditions for the accelerated development of the economy, the formation of a favorable climate for entrepreneurial activity, the improvement of the investment environment, expansion of production and services is the tax system that meets modern requirements.
The Strategy of Actions along five priority tracks for the development of Uzbekistan in 2017-2021 provides for a consistent simplification of tax administration and reduction of the tax burden by expanding the taxable base.
Recently, necessary measures have been taken to reduce inspections of business entities and to eliminate unreasonable interference in their activities. Unscheduled and counter checks of businessmen were canceled; the forms and periodicity of submission of reports were simplified.
At the same time, there are many problems in the field of tax administration. To address them, the President of Uzbekistan issued a decree "On Measures for the Basic Improvement of Tax Administration, Increasing the Collection of Taxes and Other Mandatory Payments," adopted in July this year.
This was discussed at the regular session of the International Press Club (IPC), the theme of which is "Modern tax policy of Uzbekistan: tasks and implementation mechanism."
During the event, such issues as radical improvement of this sphere, conveniences and benefits created for taxpayers, main directions of reforming the system of tax service bodies, interactive public services provided by them, development of information and communication technologies, as well as tasks and functions Inspection of the control over the completeness of the revenues to the State Budget, established in the structure of the Accounts Chamber of the Republic.
Speakers at the meeting were Deputy Chairman of the State Tax Committee Erkin Gadoev, Nazarali Narbaev and Hotambek Shakirov, Deputy Minister of Justice Nodirjon Juraev, Deputy Minister of Economy Shuhrat Ismailov, Deputy Minister of Finance Mubin Mirzayev, a responsible representative of the banking sector Saidkamol Khodjaev and Deputy Chairman of the Accounting Chamber Kahramon Akmalov . On the question of domestic and foreign journalists were answered by senior officials of the General Prosecutor’s Office, the State Tax Committee and teachers of Academy of Public Administration under the President of Uzbekistan and the Tax Academy.
Speaking at the meeting spoke in detail about the presidential decree on improving the tax field, stressing that it will provide a steady decline in the tax burden and create a favorable climate for business development and attracting foreign investment.
This document has seven major directions of reforming the system of the State Tax Service.
First of all, this is the widespread introduction of modern information and communication technologies and advanced automated analysis methods into the tax administration process, a complete transition to contactless electronic servicing of taxpayers, primarily business entities. On the other hand - ensuring timely and reliable accounting of taxable items, strengthening the responsibility of officials of authorized bodies and organizations for the timely provision of reliable information related to taxation issues.
It is also assistance to taxpayers in fulfilling their obligations in this area, developing effective mechanisms for preventing tax violations and enhancing their legal culture. As well as ensuring full coverage of taxable items and expanding the tax base through a systematic analysis of the dynamics of macroeconomic indicators and the tax potential of the regions.
An important direction is the expansion of the taxable base by rendering all-round assistance in restoring the activities of dormant enterprises, improving the financial condition of low-profitable and unprofitable facilities, strengthening the mechanisms for mutual settlements, preventing the growth of tax arrears. As well as expanding interaction with financial authorities, interested ministries and departments, as well as local authorities in matters of taxation, including through the identification of additional reserves to increase the incomes of the republican and local budgets.
The need for systematic work on the selection and placement of personnel, the staffing of tax authorities by skilled workers with high moral and moral qualities, as well as ensuring the prevention of violations among workers and creating decent conditions for their service is very relevant.
The document also establishes that as of January 1, 2018, a modern form of tax control is being introduced: tax monitoring, which provides for an extended information exchange between tax authorities and bona fide taxpayers, providing them with comprehensive assistance in resolving various current issues.
A very interesting point of the President’s Decree is that bona fide taxpayers - businesses subject to temporary financial difficulties - may be granted a tax holiday, and a court order is introduced to collect the amount of taxes and other mandatory payments revealed by the results of control in the event that the taxpayer fails to provide justifications By discrepancy.
Refund or offset of overpaid taxes and other mandatory payments is made within 15 working days from the date of the taxpayer’s appeal to the authorized bodies. The tax service is given the authority to suspend operations for a period of up to five banking days on accounts of economic entities that sell goods (works, services) without registration of receipts.
A system of automated control over the receipt of cash proceeds is implemented through the use of cash registers that provide data to the tax authorities on online calculations in Tashkent, Nukus and regional centers with the phased introduction of this system in other regions of the country.
A specialized automated system for analyzing the risks of committing tax offenses is being introduced to effectively select the objects of tax inspections, as well as to carry out permanent accounting and control by the tax authorities of the actual volume of production of highly liquid products.
The bodies of the state tax service carry out systematic monitoring of the compliance of the reporting and actual number of employees of economic entities, and, by its results, specify the taxable base.
In the structure of the Accounts Chamber of the Republic, an inspection was established to monitor the completeness of the revenues to the State Budget. And the GNK formed two main departments - the prevention of offenses in the retail trade and the provision of services and information and communication technologies. Also, four SOE structures have been renamed, with new functional tasks assigned to them.
The position of deputy chairman of the State Tax Committee - the head of the main department of information and communication technologies, responsible for the introduction of modern ICT in the activities of tax authorities was introduced.
As Nazarali Narbaev, vice-chairman of the State Tax Committee, noted in his speech, the tax sphere is studied from the critical point of view, which is why shortcomings have been revealed, work on which is conducted to date. He also noted that the main task of the tax committee is to inform taxpayers. It is necessary for the citizens of the country to understand the significance and timeliness of paying taxes.
Deputy Chairman of the State Tax Service Erkin Gadoev touched upon the issue of training and retraining of personnel. "Tax service employees should have a solid and deep knowledge base. They must skillfully analyze regional cash receipts, "he stressed.
First Deputy Minister of Justice Nodirjon Juraev noted that from January 1, 2018, it is planned to introduce a number of changes in the tax legislation. It is planned to develop 10 new draft laws in this area, as well as other regulatory documents. Their quality will be a good assistant in the development of the tax system.
Deputy Chairman of the State Tax Committee Hotambek Shakirov spoke about the goals and tasks for the introduction of information technology in the tax system, which began in 2005. For more than ten years, there have been significant achievements - a unified communication system has been created in all tax service bodies, a data processing center. "Earlier tax specialists had to come into personal contact with citizens, but thanks to IT we solved most of the problems through interactive services. Now all the possibilities of communication at a distance are created. All legal entities (there are more than 350 thousand of them in the country) have personal offices through which we contact them. But individuals cannot take advantage of this opportunity. With them things are more complicated - the lack of many computer equipment, the inability of people to use it, hamper the position of the tax committee. But on the other hand, most citizens have mobile phones, smart phones. More than 15 interactive mobile applications have been created, which offer great opportunities for both the tax committee and citizens, "the speaker said.
When investors want to invest, they first examine the tax system," said Botir Arifjonov, the founder of Le Bazar. - I would suggest to the employees of the tax inspection to create a short and convenient information brochure in electronic form, for a quick familiarization with the tax system of our state.
Expert Hikmat Abdurakhimov, chairman of the Association for International Business and Technology (AMBiT), introduced a proposal to reduce taxes, Deputy Finance Minister Mubin Mirzayev said that this is a great desire, but for this it is necessary to create new jobs to ensure cash receipts to the budget on that same level.
The first deputy of the Chamber of Commerce and Industry, Islam Jasimov, recommended that when working out bills related to taxes, work together with entrepreneurs, because they, by virtue of their experience, submit the right thoughts and make correct comments.
The responsible employee of the banking sector Saidkamol Khodjayev noted that a project is currently underway to liberalize the foreign exchange market. Considered is the issue of cashing in ATMs from plastic cards. It should take into account the capacity of cash in ATMs, as well as the size of notes of Uzbek currency units. The speaker did not say the exact time, but said that all this will come true in the near future. He also noted that the insufficient number of terminals in the country is the main problem for today. Since recently, banks have been authorized to purchase terminals abroad, which will subsequently be connected to the central bank’s base.
AFFORDABLE HOUSING FOR POPULATION
Another session of the International Press Club, held in cooperation with Ipoteka-Bank, was held in a casual conversation over a cup of coffee. One of the five priority areas outlined in the Strategy for Actions was discussed: strengthening social protection of the population.
The participants of the event particularly noted that the issue of eliminating housing problems is important in ensuring the well-being of families. Housing construction contributes not only to the solution of social problems related to raising the standard of living of the population, but also to the development of communal, transport and communication spheres, which is very important for the state that has moved onto the track of a market economy. At present, large-scale work is being carried out in the republic to implement these tasks.
In particular, in order to further improve the level and quality of life of the population living in the cities of the republic, including young families, residents of dilapidated apartment buildings and other categories of citizens in need of better housing conditions, affordable modern apartment buildings are successfully being built throughout the country.
In implementing this task, a special place is given to IKIB "Ipoteka-Bank", which is defined by a financing commercial bank with the functions of issuing loans to customers for the construction and reconstruction of apartment buildings, as well as the sale of apartments by issuing mortgage loans to borrowers for their purchase in a multi-apartment building.
Experts of Ipoteka Bank told the participants of the event that in the next four years a total of 945 five-, seven- and nine-storey energy-efficient affordable apartment buildings will be built in all regions of the republic in conjunction with the accompanying engineering and social infrastructure. Actually, work is underway to build 191 houses planned for delivery this year (including 102 in the capital).
The houses are built using modern building materials of domestic production that are not inferior in quality to foreign analogues. Around each building are created recreational areas, playgrounds, car parks, collection points and other amenities.
Participants of the event received detailed information on the conditions necessary to secure affordable housing. In particular, the assignment of individuals needing better housing conditions is carried out by the territorial commission. These people provide the commission with a package of documents confirming the financial condition, as well as compliance with the established criteria. And she decides on fixing the apartment or on the refusal indicating specific reasons. With a positive decision, one of the apartments is assigned to an individual who needs to improve housing conditions.
Specialists of the bank also talked about the terms of lending affordable housing.
Ipoteka-Bank will provide mortgage loans for up to 20 years, including a three-year grace period, with an interest rate of 7% for the first five years, and further in the amount of the refinancing rate of the Central Bank. The initial fee should be at least 25% of the total cost of the apartment.
Also during the conversation was given full information about a number of tax benefits provided for the borrower. The taxable income of individuals (borrowers), as well as their family members, does not include the amount of wages and other income subject to taxation, directed to repay the principal debt and accrued interest on mortgage loans for the purchase of an apartment in an apartment building. In the event that the organization in which the borrower is employed has paid the down payment on condition of non-return, the funds paid are also not taxed. Until the loan for the apartment is repaid, there is also no property tax.
The conversation took place in the spirit of openness and mutual understanding, present had an opportunity to exchange opinions and get exhaustive answers to all questions.
(Source: «Uzbekistan Today» newspaper)

SOCIETY

Uzbek citizens, injured in road accidents in Kyrgyzstan, return to Tashkent
Citizens of Uzbekistan, who were injured in a road accident near the village of Kyzyl Oruk in Issyk-Kul region, were transported from Kyrgyzstan to Uzbekistan, the press service of the Ministry of Emergency Situations of Uzbekistan said.
On instructions of the President of Uzbekistan Shavkat Mirziyoyev, on 5 August 2017, the victims returned to Uzbekistan on special flight. The Uzbek doctors accompanied them.
The press service of the Uzbek Foreign Ministry said the victims of the accident were taken to the Republican Scientific Research Center for Emergency Medical Care in Tashkent.
On 3 August 2017, automobile and passenger mini-van collided and 10 people were injured. The minivan included 11 people of Uzbekistan, including members of the children’s dance from Uzbekistan accompanied by adults. The injured were hospitalized.
Kyrgyz doctors after examining victims of the road accident, they expressed concern of the health state of Igor Orlov, born in 2016. He underwent surgery on 3 August. Other citizens received injuries of moderate severity, the Ministry of Emergency Situations clarified.
The Ministry of Emergencies said that the victims of the accident were accommodated in the Republican Scientific Center for Emergency Medical Care, where they receive necessary treatment under the supervision of the Center’s doctors. Psychologists of the Ministry of Emergency Situations provided the necessary psychological assistance.
The Ministry of Foreign Affairs of Uzbekistan expressed its gratitude to representatives of the republican and local authorities, medical institutions of the Kyrgyz Republic for providing medical assistance to Uzbek citizens, solving the issues of organization of special flight from Tashkent to airport of Tumchi and back.
(Source: UzDaily.com)

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