Uzbekistan-2027: The Most Important Changes in the Tax System (Cashback, deposits, rate)
The Institute of Fiscal Analysis under the Ministry of Economy and Finance has presented the revolutionary main directions of the tax policy planned for 2027 for public discussion.
Most sensational proposals:
Complete abolition of the 1% cashback: The institute notes that cashback has served its purpose and is becoming too costly for the budget (2.1 trillion soums in 2027).
Alternative option: It is proposed to retain the 12% VAT cashback on certain food products for vulnerable segments of the population and introduce targeted lotteries with large prizes.
5% tax on interest received from bank deposits: As of May 2026, the volume of deposits amounted to 170 trillion soums. The institute proposes taxing these incomes at a 5% rate, similar to dividends. This could bring an additional 1.4 trillion soums to the budget.
Transition to progressive income tax: Since the single 12% rate in effect since 2019 no longer fully meets the principles of fairness, it was proposed to switch to a system of levying income tax based on a progressive scale in the medium term.
Rates retained and reduced:
Base tax rates: It is proposed to keep the amounts of Profit tax (15%), personal income tax (12%), and value-added tax (VAT - 12%) unchanged.
Reducing the profit tax to 15%: It was proposed to lower the current 20% profit tax rate for banks, mobile operators, and certain other sectors to a single 15%.
Mechanisms to cover budget losses:
Taxation of banking services with VAT: To cover the 859 billion soum loss resulting from the reduction of the profit tax, it is proposed to subject certain commission services of banks (account maintenance, cash services, currency exchange) to VAT.
Increasing the excise tax on alcohol: It was proposed to raise the excise tax rate for alcohol products from 48 thousand soums to 70 thousand soums, accompanied by a new mechanism that reduces the tax burden on local manufacturers.
Other important changes and results:
VAT efficiency: By fully automating VAT refund processes, it is planned to increase the efficiency coefficient from 57% to 63% and generate an additional 5 trillion soums in revenue.
Inefficiency of tax benefits: It was stated that reducing the social tax from 12% to 1% in the public catering sector did not yield the expected result (increasing formal employment).
IEs (Individual Entrepreneurs) and self-employed: It was proposed to eliminate the gap between them and equalize the social payment with the minimum wage.
Carbon tax: A carbon tax for large industrial enterprises is planned to be introduced starting from 2028.
Objections:
During the event, tax consultant Murod Muhammadjonov emphasized that the main focus should be on reducing the shadow economy rather than changing tax rates. According to him, in conditions where over 90% of businesses in certain sectors operate informally, clear mechanisms for bringing them into the legal economy are not sufficiently reflected.
Main Data Table
Criterion / Data | Details |
Proposing body | Institute of Fiscal Analysis (under the MEF) |
Target year | 2027 |
Sensational proposals | Abolition of 1% cashback, 5% tax on deposits, Progressive income tax |
Additional budget revenue (Expected) | From VAT efficiency: 5 trillion soums; From deposits: 1.4 trillion soums |
Those with reduced tax burden | Banks and mobile operators (Profit tax down to 15%) |
Center of objections | Lack of mechanisms to reduce the shadow economy |
Carbon tax (Plan) | From 2028 (2027 is preparation) |
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