Uzbekistan to introduce zero VAT rate on farm products from 2026

President Shavkat Mirziyoyev reviewed measures to establish a value-added chain in agriculture at a presentation on 4 September.

According to the official report, the shadow economy remains significant in the agricultural sector, with not all production reflected in official records. The current VAT on food sales stands at 12 percent.

The issue was earlier raised during the president’s open dialogue with entrepreneurs. Mirziyoyev instructed relevant agencies to ease the tax burden and create more favorable conditions for farmers and household producers.

In cooperation with the International Monetary Fund and local and foreign experts, proposals were developed to bring the agricultural sector out of the shadows.

Under the new framework, starting from 1 January 2026, agricultural enterprises, farmers, and household producers will be able to sell self-produced agricultural products – excluding grain and cotton – at a zero VAT rate.

At the same time, the VAT refund mechanism for production costs such as seeds, fertilizers, fuel, transport, and electricity will be preserved. As a result, farmers and household producers are expected to retain around UZS 300 billion annually, with an additional UZS 400 billion recoverable through tax refunds.

Authorities have been instructed to explain the new system to farmers, ensure its effective implementation, and incentivize food production.