Fergana tax authorities block UZS 125.4 billion in fraudulent VAT claims after uncovering fake trade scheme

According to the regional tax administration, the violation was flagged during a routine digital market analysis conducted as part of ongoing government efforts to combat the shadow economy.

Investigators discovered that a Fergana resident, identified as T. Z., had registered two corporate entities: E.F.F. LLC and F.E.O.Z. LLC. In May, these companies issued electronic invoices falsely documenting the purchase of flour and butter worth UZS 1,200,000,000,000 from a third company, T.B.S.E. LLC, which is registered in Termez.

A subsequent audit of the companies' May VAT filings combined with physical inspections of their registered warehouse addresses revealed that no commodities were ever delivered. Furthermore, investigators found no evidence of any financial transactions or bank transfers passing between the involved businesses.

Tax officials moved quickly to freeze the VAT certificates of both E.F.F. LLC and F.E.O.Z. LLC. The organizations have since been forced to submit amended tax returns, and the entire UZS 125,400,000,000 in fraudulent VAT credits has been annulled.

The tax administration reported that the primary goal of the operation was to generate real fiscal receipts for fake purchases. The masterminds intended to sell these physical and digital receipts across social media platforms to buyers who would then scan them to collect illegal cashback payouts from the state.

All case files and evidence collected during the tax probe have been handed over to law enforcement agencies for criminal prosecution.