The practice of Tax Gap has been banned in Uzbekistan

The practice of using the tax break coefficient (Tax Gap) in compensation (refund) of Uzbekistan's value added tax is prohibited. The Tax Committee informed about it.

It is noted that at the beginning of 2023, the term of the chamber tax audit regarding the validity of the VAT refund was reduced to 30 days.

Also, the procedure for suspending the validity of the special VAT registration certificate was cancelled. The VAT certificate is suspended when at least one of the 13 previously approved criteria is met.

Currently, the validity period of the VAT certificate can be suspended only in cases where the transactions carried out do not correspond to the nomenclature of the purchased and sold goods (services). In all other cases, the procedure for suspending the validity of the VAT certificate was canceled.

In addition, the threshold amount of income of business entities that must pay monthly profit tax payments has been increased from 5 billion soums to 10 billion soums.

The following are prohibited during the camera tax audit:

entering the territory of the taxpayer;
inspection of the territory and buildings of the taxpayer;
requesting documents from the taxpayer and subpoenaing him;
seizure of taxpayer's documents and belongings.
With the exception of the camera tax inspection, which is carried out during the reimbursement (return) of VAT.

On August 18, at an open dialogue with entrepreneurs, Shavkat Mirziyoyev promoted important initiatives to create a comfortable environment without bureaucracy and simple tax administration. In surveys, 70% of VAT payers stated that the use of the tax gap coefficient, i.e., the Tax Gap system, for the return of this tax is unfair. The excessive number of complaints related to corruption in the tax system is also related to Tax Gap.

"You are not justifying your salaries, you are not helping the people, entrepreneurs, you are becoming an obstacle. This is how Tax Gap is tormenting them, standing and applauding because it is causing corruption," said the president to the Chairman of the Tax Committee, Sherzod Kudbiyev.

At that time, the head of state announced that starting from October 1, the practice of applying the tax break coefficient in the return of value added tax, i.e. Tax Gap, will be canceled.

Source: Daryo.uz