The Tax Gap system is abolished

Starting from October 1 of this year, the practice of using a tax break coefficient in the return of value-added tax, i.e. Tax Gap, will be cancelled. This announcement was made today, August 18, during the open dialogue of President Shavkat Mirziyoyev with businessmen.

The Chamber of Commerce and Industry, along with the Business Ombudsman and representatives of the industry, will introduce an open rating of entrepreneurs.

In this case, starting from January 1 of next year, companies with the highest rating will:

• be exempt from all types of tax audits;
• have the excess value-added tax returned to them within one day;
• see the practice of temporarily suspending the VAT payer's certificate cancelled.

During the meeting, the president pointed out that camera control has now evolved into a full-fledged tax audit, which also paves the way for corruption.

It is now strictly forbidden to demand a document from an entrepreneur or summon them to the office under camera control.

Additionally, a separate open platform will be created, establishing a system in which entrepreneurs themselves will evaluate the quality of services provided by tax collectors.

Currently, both financial fines for entrepreneurs and administrative fines for individuals are imposed for a single tax violation. It is now stated that this practice will be cancelled.

It was mentioned that fines should not be the reason for halting entrepreneurs' activities. From this perspective, all financial sanctions will be reviewed within three months, and fair standards will be established.

For reference, the Tax Gap system represents the difference between the full potential tax revenue legally payable to the government and the actual tax revenue collected. The main variables that determine the size of the Tax Gap in the country include the structure of the economy, the rule of law, and tax ethics.