FinMin: Reducing the VAT rate by 5% will cut revenues to the state budget by 10 trillion soums per year

Reducing the rate of value added tax (VAT) by 5% will reduce revenues to the state budget by 10 trillion soums per year, which is about 2% of GDP, the Ministry of Finance reported. 

It was earlier reported that the head of state instructed the Ministry of Finance to develop concrete proposals on reducing the VAT rate, which today stands at 20%.

“According to preliminary estimates, reducing the VAT rate by 5% will reduce revenues to the state budget by approximately 10 trillion soums per year or about 2% of GDP,” the Finance Ministry said.

It was noted that in order to further support businesses, the ministry was instructed to introduce a draft presidential resolution on reducing the VAT rate from the current 20 to 15%.

“Reducing the VAT rate from 20% to 15%, together with measures aimed at ensuring its neutrality, has also been proposed in the new edition of the Tax Code (published by the Ministry of Finance for discussion). It will positively affect the activities of business entities,” the ministry added.