11.09.2019

President of the Republic of Uzbekistan Shavkat Mirziyoyev chaired a videoconference meeting on September 11 to discuss efforts towards promotion of small business and private entrepreneurship as well as revenue generation to the national budget.

As it was noted at the meeting, a completely new system is taking shape in Uzbekistan in small business development, envisaging inter alia comprehensive support for entrepreneurs and removal of scores of bureaucratic obstacles.

The system is built on the concerted work of the Prime Minister’s Receptions to Consider Appeals from Entrepreneurs, the Business Ombudsman, the Chamber of Commerce and Industry, the Ministry of Justice, and the economic block agencies and bodies led by first deputy hokims, with the coordinating role of the recently established Agency for Small Business and Entrepreneurship Development.

A new concept is being introduced, under which commercial banks act as business partners of entrepreneurs and provide them with financial support.

Owing to systemic measures taken over the past 8 months of this year, 70 thousand business entities were created, which is twice as many as those set up in the same period last year.
Meanwhile, untapped reserves and opportunities are in abundance in the regions for business development. Many local officials, it was stated with regret, still have little understanding of how the new business development system works. 

Over the three months since the launch of the Prime Minister’s Receptions, more than 12 thousand appeals have been received, most relating to lending issues and land allocation.

The largest number of appeals was filed in Tashkent, Kashkadarya, Andijan and Samarkand regions. Of these, 9 thousand – or 75 percent – were resolved on the spot, including 40 percent – directly at the district level. This is quite indicative of the fact that previously, the lower-level officials were not used to deal with entrepreneurship problems at all.

The Cabinet of Ministers, together with the Agency for Small Business and Entrepreneurship Development, has been instructed to regularly discuss the problems set forth in the appeals of business entities to the Prime Minister’s Receptions, focusing on their solution at the local level.

In particular, working groups are set up to elaborate practical proposals for the specialization of each district and town in a precise direction, with an eye to their capacities and distinctive features, as well as for the implementation of new investment projects in accordance with this specialization. The President also instructed them to conduct open dialogue with local entrepreneurs on issues of interest to them and take measures to eliminate obstacles.

The head of our state highlighted impending steps to perfect the legislative framework essential for the improvement of the business climate.

In particular, Shavkat Mirziyoyev pointed to the fact that innovations in the field of doing business, issuing licenses and permits is still far from working properly.

Thus, as few as 103 out of 693 types of services, or 15 percent of those included in the Integrated Register of Public Services, are provided through public service centers and in electronic form. This is one of the factors preventing individuals wishing embark on business from doing so.

In this regard, the Ministry of Justice was instructed to work out and submit to the Cabinet of Ministers a draft resolution within a month, providing for the introduction of online information and consulting services for entrepreneurs, digitalization of all public services offered hitherto in paper form.

Measures were also identified for a fuller use of a single electronic system for the application of construction documents.

In many countries, business entities are divided into three categories (small, medium-sized and large enterprises), and the government has a support policy specific for each group. In Uzbekistan, in contrast, there is no concept of medium business, a class particularly instrumental today in economic development overall.

With this in mind, the Cabinet of Ministers and applicable government agencies have been instructed to introduce the category of medium-sized businesses, to revise the criteria for small and large enterprises, and devise within three months specific proposals for support from the state, with individual mechanisms for each category.

The meeting participants afterwards deliberated on the second issue on the agenda – the state of revenue generation to the national budget. Over the past 8 months, it was noted, returns drawn in proved in excess of forecast indicators.

Issues of using reserves to boost revenues and expand the tax base were discussed. The President stressed the importance of increasing the collection of fixed tax from individual entrepreneurs and the legalization of shadow employment.

Shavkat Mirziyoyev pointed to the fact that the city of Tashkent, as well as Surkhandarya and Namangan regions have multibillion-soum uncollected taxes, and that the heads of a number of districts and towns are dormant and continue to fulfill forecast indicators thanks to large taxpayers.

Organized in cooperation with experts from the International Monetary Fund and the World Bank, the inspection for work with large taxpayers is an important factor for studying reserves and increasing tax revenues. In order to uplift the effectiveness of these efforts, the head of our state said, it is necessary to transfer large taxpayers to electronic invoices and integrate them with computer accounting programs.

The President instructed to provide assistance in reporting to about 30 thousand farms across the nation that are switching to the payment of value added tax from October 1 and introduce relevant software in all regions.

The Ministry of Finance has been tasked with working out substantiated proposals for reducing the value added tax rate.

For direct work with 20 cities and regions that provide 21 percent of all budget revenues, the head of state assigned concrete national-level officials to them.

The heads of local tax departments whose work on the revenue generation to the national budget is evaluated as weak received strict warning notice. The President underscored that it is strictly forbidden for local officials to meet the forecast parameters in budget revenues by charging advance payments from enterprises for forthcoming periods.

Shavkat Mirziyoyev insisted that the new edition of the Tax Code be drafted carefully, taking into account the proposals voiced during discussions with entrepreneurs, experts and representatives of research institutions. 

On the issues discussed at the videoconference meeting, responsible officials and hokims presented their reports and proposals.

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