Uzbekistan to annul certain VAT exemptions

The policy change is set to impact various sectors, including trade services and the import of specific goods into the nation. Notably, exemptions will be removed for areas such as trade turnover, medical services, veterinary services, medicines, veterinary drugs, and medical and veterinary supplies. 

In addition, imports of particular raw materials specified by legislation will also be subject to VAT. Services provided to the population that were previously VAT-exempt, including water supply, sewage, sanitary cleaning, and heating supply, will now incur VAT charges at the standard rate, as opposed to the zero rate applied until now.

This departure from precedent represents a concerted effort by the government to reform tax regulations, with a focus on streamlining exemptions and expanding the tax base. While aiming to enhance the efficiency of the tax system, this decision will also inevitably lead to a shift in the cost dynamics for businesses and end-users.

For consumers, the introduction of VAT in services that were previously non-taxed means an expected increase in prices for essential utilities. The business community anticipates having to navigate the new tax landscape, adjust pricing strategies, and communicate changes transparently to customers.

As the Uzbek market braces for these alterations in the tax framework, entities across the spectrum are encouraged to acquaint themselves with the forthcoming changes to ensure compliance and a seamless transition into the enhanced tax structure.