SINGLE TAX OF FIVE PERCENT

According to the ranking of the World Bank, Uzbekistan occupies a worthy place among the ten countries in the world in recent years with the best record in the creation of a favorable business environment for business.

It is another international recognition of created conditions and guarantees, provided under the supervision of our country’s President, to do business. Provided various tax benefits and reduction of single tax rate for entrepreneurship is the consistent development of the sphere.

This year, single tax rate for small businesses and micro-firms, which operate in the service sector, decreased by one per cent relative to 2015 and is set in the amount of five percent. This is the optimal rate in the world. The tax practice of foreign countries does not have a separate taxation scale for small or medium-sized enterprises. In many developed countries taxes are levied according to income. For example, in the United States, large and small businesses pay taxes in accordance with their income; the minimum tax rate is 15 percent. In the UK, small and medium enterprises, as well as other taxpayers, are subjected to the rules of accounting and income declaration. The increasing tax scale acts. The tax rate increases with income.

 The rate of single tax for micro and small enterprises was introduced in accordance with the Decree of President Islam Karimov on July 1, 2005, - Khamidjon Habibiddinov, head of the Central Administration of Taxation at the State Tax Committee of Uzbekistan said. - It means that the sphere representatives will pay a single tax from this day instead of compulsory contributions to the Pension fund, Republican road fund and School education fund. It allows them to increase revenues and consistently develop activities.

In 2005, a single tax rate was 13 percent. This figure decreases each year and now stands at five percent. The fact that regardless of the increase in the income tax rate does not change is noteworthy. By reducing the rate of single tax payment in the current year it is expected that savings of micro and small-scale add up to 58,4 billion soums.

Our country conducts a policy of comprehensive support to small businesses and private entrepreneurship, providing benefits to them, preferences, guarantees, creation of favorable conditions for development. As a result, the share of small business and private entrepreneurship in the gross domestic product amounted to 56,7 percent compared to 31 percent in 2000. In the area, it produced one third of the total industrial output of the country and 98 percent of agricultural production. The industry employs more than 77 percent of the population.

In accordance with Article 354 of the Tax Code of the Republic of Uzbekistan payers of the single tax from the date of registration have the right to extend the period of payment of the single tax for one year. After the expiry of the grace period, prolonged amount paid in equal shares within twelve months in accordance with the legislative instruments. For micro and small businesses, it is a powerful incentive for the organization of work in the first year of operation.

Article 356 of the Tax Code stipulates a reduction of the tax base within five years for the purchase of new technological equipment, introduction of quality management systems, certification of products for compliance with international standards, the acquisition systems for laboratory tests and trials, and for processing equipment, from the moment it is put into operation, no more than 25 percent of the tax base. It also provided the conditions for the development and coordination of the enterprise’s activities in accordance with the requirements of the time.

However, the benefits of income tax and single tax for small businesses and micro-firms, which operate in the service sector, is extended until January 1, 2017.

Provided opportunity for the development of business and entrepreneurship are an important factor in improving our people’s welfare and the country’s prosperity.

Jahon Information Agency