Tax Committee plans to automate VAT refunds to support business growth

The Tax Committee of Uzbekistan is set to automate the Value Added Tax (VAT) refund process, moving away from a system that frequently causes delays for local enterprises. Jahongir Abdiev, Deputy Chairman of the Tax Committee, announced the upcoming changes during a tax forum on February 17, 2026.

Addressing VAT issues within the context of the national tax policy strategy through 2030, Abdiev described the current refund process as “one of our pain points.” He promised “radical” shifts in VAT administration starting this year to better serve the growing number of taxpayers.

Under the current regulations, if tax authorities have questions regarding even a small portion of a VAT refund application, the entire request is returned to the taxpayer. This forces businesses to resubmit the full application, and a third attempt often results in the taxpayer being flagged in a high-risk category.

The proposed automated system, developed in partnership with the Ministry of Economy and Finance, aims to solve this by allowing partial refunds.

“In the new system, the applicant will be automatically refunded the entire amount of VAT, except for the part where the tax authorities have specific questions,” Abdiev explained.

For instance, if a company applies for a refund of UZS 1,000,000 and authorities dispute UZS 200,000, the remaining UZS 800,000 will be credited to the business immediately. This targeted approach is designed to resolve disputed amounts without freezing a company's entire claim.

The Deputy Chairman also acknowledged taxpayer frustration regarding VAT offsets being blocked due to the actions of counterparties. To mitigate this, a scoring system for electronic invoices is being implemented. This system will assess risks more accurately, preventing compliant businesses from being penalized for the tax irregularities of their business partners.

The new automated platform is expected to enter the testing phase within the next 2–3 months.

The reform comes at a time of rapid growth in the domestic market. As of January 1, 2026, there were over 252,400 VAT payers in Uzbekistan – a more than 25% increase compared to the previous year.

The distribution of VAT payers across the economy is concentrated in several key sectors:

Trade: 89,500 taxpayers
Agriculture: 50,000 taxpayers
Industry: 29,500 taxpayers

The Tax Committee expects that automating refunds will significantly improve the cash flow and operational stability of these businesses, particularly for those in high-volume sectors like trade and manufacturing.