New year, new rules: What will change in Uzbekistan from January 2025

From January 1, 2025, Uzbekistan will implement several legislative changes affecting public transport, taxation, and business operations. QALAMPIR.UZ has compiled the key updates.  

Public transport fare increase in Tashkent

Starting January 1, cash fares for buses and the metro in Tashkent will rise from 2,000 sums to 3,000 sums. However, the cashless fare will remain at 1,700 sums.  

Additionally, cash payments inside buses will be discontinued. Passengers will need to purchase one-time QR-code tickets from devices at bus stops. The QR-code must be scanned at the validator upon boarding, and tickets should remain undamaged and retained for the duration of the trip for potential checks.  

Expanded powers for local governors

District and city governments (local governments) will now be able to form Public Councils of Entrepreneurs to foster continuous communication between business entities and state administration bodies.  

Governors will also have the authority to appoint and dismiss heads of departments from various ministries and agencies, subject to coordination with regional offices. They will be able to implement incentive or disciplinary measures against officials as needed.  

Taxation policies

Entrepreneurs in the sewing, knitting, footwear, leather, and perfumery industries will continue to pay a 1% profit tax if they meet specified conditions. Income tax for employees will remain at the same rate.   

From April 1, 2025, all legal entities selling pharmaceutical products or providing medical services will automatically become VAT payers, regardless of income.  

A new center will be established to assist entrepreneurs in accessing international financial markets. The center will provide consulting services for attracting investments from international organizations and foreign financial institutions without requiring state guarantees.  

Additionally, Uzbekistan’s Trade Development Company will receive $100 million in extra funding to provide loans for replenishing working capital. From January 1, revolving loans in national currency will be issued for projects involving agricultural product packaging and calibration.  

From January 1, new export fees will apply:  
- Cotton Yarn: 2% of export price per kilogram (capped at $0.05 per kg).  
- Knitted Fabric: 1% of export price per kilogram.  

These measures aim to enhance domestic production while balancing export incentives.

Uzbekistan to provide housing for citizens affected by termite damage

Starting January 1, 2025, citizens whose homes are declared uninhabitable due to termite and insect damage will be provided with alternative housing. This is outlined in a resolution by the Cabinet of Ministers, effective from November 4, 2024.  

### Administrative Process  
The resolution establishes new administrative regulations for identifying termite-damaged houses and recognizing them as unfit for living.  

From January 2025, a Commission for the Identification of Houses Damaged by Termites and Other Insects will operate under district and city governments. Citizens can apply for inspections through Public Service Centers or the **Unified Interactive Public Services Portal (UIPS).

Applicants may either visit the service center in person or apply electronically. Upon personal visits, the required forms are completed by staff and electronically submitted to the commission within 10 minutes. Online applications are automatically forwarded to the commission. 

The commission will evaluate applications within 7 working days, visiting affected homes to assess infestation levels, the technical condition of the house, and overall habitability. If a house is deemed unfit for living, the commission's conclusion will be forwarded to the Council of Ministers of the Republic of Karakalpakstan, as well as regional and Tashkent city governments, for formal removal of the property from the housing stock.  

Upon confirmation, applicants will receive replacement housing under established procedures.  

Public service may be denied under the following conditions:  
- Incorrect or misleading information in the application.  
- Refusal by the applicant to allow the commission to inspect the property.  
- The house, although damaged, remains habitable.  
- No evidence of termite or insect damage is found.  

No other grounds for service denial are permitted.

Ban on wild animals in circuses

A separate resolution from the Cabinet of Ministers will ban the use of wild animals in state and traveling circuses (tents) starting January 1, 2025.  

The resolution specifies a list of wild animals prohibited from private ownership or captivity in semi-free conditions or artificial habitats. Wild animals included in this list may only be kept in zoos or licensed nurseries under permits issued by the Ministry of Ecology, Environmental Protection, and Climate Change.

Key points of the ban include:  
- Private individuals may not keep wild animals from the list in captivity, artificial environments, or semi-free conditions.  
- Wild animals are prohibited in all circuses, including traveling shows.  
- Animals from circuses or private owners can be transferred to zoos or nurseries, either for a fee or free of charge, by contract.  

If animals belong to Uzbekistan’s native fauna, they may be released into their natural habitat. Non-native species will be relocated outside the country.  

The Ministry of Ecology, in collaboration with the Ministry of Internal Affairs, the National Guard, and local authorities, must ensure all wild animals held by circuses or individuals are transferred to zoos or nurseries by January 1, 2026.

Uzbekistan to boost cultural sector salaries and introduce national time scale in 2025

Uzbekistan is set to implement several reforms starting January 1, 2025, aimed at improving employee welfare in the cultural sector, establishing a national time scale, and enhancing the monitoring of individuals under house arrest.  

Salary increases in the cultural sector

On November 22, 2024, President Shavkat Mirziyoyev signed a decree to raise the salaries of employees in the fields of culture, art, libraries, and museums.

The following increments are outlined:  
— 20% increase starting January 1, 2025.  
— Additional 15% increase from July 1, 2025.

The decree also mandates the introduction of a Key Performance Indicator (KPI) system to evaluate employee performance in state cultural institutions and organizations. This initiative aims to boost productivity and ensure accountability in the cultural sphere.  

Uzbekistan to launch national time scale (UTC UZ)

From January 1, 2025, Uzbekistan will introduce the national time scale (UTC UZ), marking a shift to an independent standard of exact time across the country.  

This decision stems from a Cabinet of Ministers resolution aimed at enhancing the activities of Uzbekistan’s Time and Frequency Service.

The National Metrology Institute of Uzbekistan will be responsible for managing the Time Service and participating in the formation of Coordinated Universal Time (UTC). This body will oversee the accurate establishment and distribution of UTC UZ to government bodies and organizations under a public-private partnership.

Electronic bracelets for remote monitoring

Uzbekistan will gradually implement electronic monitoring systems for individuals under house arrest or sentenced to imprisonment. The new system, which uses electronic bracelets, will ensure real-time monitoring of individuals' locations starting January 1, 2025.  

Key Features of the Electronic Bracelet Program:
- The bracelet is worn on the calf or, if necessary, the arm (in cases of injury or medical restrictions).  
- For women, the bracelet is applied by female inspectors from the internal affairs department.  

Exemptions:
The following individuals are not required to wear electronic bracelets:  
- Minors under 18 years of age.  
- Pregnant women or women with children under 3 years old.
- Persons with disabilities (first or second group).  
- Individuals with medical conditions such as pacemakers or skin diseases.  

Electronic bracelets will be applied to probation violators or individuals involved in public order offenses during their sentence.  

If the bracelet battery runs out, the device is tampered with, or the individual leaves the designated area, law enforcement is immediately notified through the “Electronic Bracelet” information system.

In cases of escape, the local internal affairs office will take necessary action to detain the individual in accordance with legal procedures.

Uzbekistan to introduce VAT refunds and tax benefits for catering businesses in 2025

Starting January 1, 2025, Uzbekistan will implement a series of economic reforms aimed at supporting the catering industry, boosting employment for low-income families, and enhancing financial oversight across government bodies.

In a bid to stimulate the restaurant and cafe sector, part of the Value Added Tax (VAT) paid by catering businesses will be refunded as cashback.

40% of VAT will be refunded immediately after payment for enterprises that conduct cashless transactions throughout the month.
Additionally, the profit tax for restaurants and cafes transitioning to VAT payment will be reduced by 50%.
This initiative aims to encourage digital transactions, improve financial transparency, and ease the tax burden on catering businesses.

Social Tax Incentives for Low-Income Families
To support employment among low-income families, social tax benefits will be introduced:  
- For a family member listed in the register of poor families who secures a job with a monthly salary of at least 1.5 times the minimum wage, social tax will be reduced to 1% for three years.

This policy is expected to provide financial relief to employers hiring from vulnerable segments, fostering job creation and economic stability.  

Risk management committees to oversee financial stability

From January 1, 2025, “Risk Management” Committees will be established across various government levels and large state-owned enterprises to prevent financial and operational risks.  

These committees will operate on a collegial basis within:  
- The Council of Ministers of the Republic of Karakalpakstan.  
- Regional and Tashkent city governments.  
- Ministries and state departments.  
- Organizations with at least 50% state ownership**.  

Their responsibilities will include identifying and mitigating risks in financial operations and decision-making processes.  
Budget Transparency and Oversight
In line with efforts to increase financial accountability:  
- Information regarding state budget allocations and trust funds for regional development will be submitted to Councils of People's Deputies.
- Local councils will have the authority to request and monitor how these funds are distributed and utilized.  
- The results of quarterly audits conducted by the Accounts Chamber will be reviewed during government meetings, ensuring transparency and accountability in public finance management.