23:51 / 11.08.2020
592
Uzbekistan’s budget losses due to the pandemic estimated at 4.4 trillion soums

Quarantine measures have led to a decline in economic activity and, as a result, to a decrease in revenues to the treasury. Such a conclusion can be drawn from the statement on the execution of state budget revenues as of July 1, published by the Ministry of Finance. Norma expert Jorilla Abdullayev elaborated on this remark.

Photo: KUN.UZ

According to the Ministry of Finance, the state budget revenues in the first half of 2020 amounted to 58.2 trillion soums. This is 7.5 trillion soums (14.8%) more than in the same period last year.

At first glance, everything looks to be going well. However, if quarterly receipts are analyzed, a different picture emerges. Revenues in the first quarter increased by 23.4% compared to the same period last year. If such a growth rate was maintained in the second quarter, in the first half of the year the treasury would have received about 62.6 trillion soums. Thus, based on the hypothesis of steady growth, the estimated budget losses amount to about 4.4 trillion soums. The main reason for this is the sharp decline in economic activity due to the pandemic.

Losses are obvious but revenue growth has also been observed. This can be clearly seen by analyzing the revenue by types of taxes. The main part of state budget revenues (more than 80%) was formed due to the following five main taxes: VAT (24.6%), income tax (20.3%), subsoil use tax (13%), personal income tax (12.5%) and excise tax (10%).

The followings have led to a decrease in tax revenues:

• the pandemic affecting the economic activity of taxpayers;

• reduction of the VAT rate, which is the main part of budget revenues, and other benefits provided from the beginning of the year;

• providing small businesses and entrepreneurs most affected by the pandemic (tourism, catering, etc.) with tax benefits and preferences.

The followings have been factors in the growth of tax revenues:

• an increase in income tax and subsoil use tax revenues at the expense of mining enterprises. Tax rates have been raised for them, the order of income tax has changed. Along with the rise in the price of precious metals, this has led to a significant increase in budget revenues;

• some taxpayers have switched to paying general taxes due to the fact that in 2019 their turnover exceeded 1 billion soums;

• indexation and increase of resource tax rates;

• much higher rates of tax revenue in the I quarter;

• full transfer of dividends to the state budget from the net profit of state-owned enterprises in 2019;

• transfer of 50% of the balance of funds on deposit accounts to the budget, which has been formed at the expense of deductions from taxes, mandatory fees, fines and others.

Main conclusions:

1. The pandemic had a serious negative impact on the financial-economic activities of business entities, which was reflected in tax revenues to the budget.

2. The measures taken by the state to some extent solved the problems arising in the activities of economic entities, allowed to avoid the catastrophic situation associated with the provision of state budget revenues.

3. In order to support small businesses at the expense of privileges and preferences, changes were made to the tax procedure. At the same time, the largest enterprises in the country have become the main entities that cover budget losses and provide tax revenues.

Top