P2P money transfers to be brought under monitoring in Uzbekistan 

P2P operations will be monitored in Uzbekistan. This was discussed during a presentation on improving tax administration and reforming the activities of tax authorities, reviewed by President Shavkat Mirziyoyev on April 6.

According to the report, budget revenues have been growing faster than the pace of the economy over the past two years due to the expansion of the tax base. The International Monetary Fund has also acknowledged that these results are being achieved through stronger tax administration and the reduction of the shadow economy. At the same time, it is planned to increase tax revenues to 491.5 trillion soums by 2030 and reduce the share of the shadow economy from 28 percent to 19.6 percent.

During the meeting, it was emphasized that the largest reserve for increasing tax revenues lies in reducing the shadow economy. The President highlighted the need to ensure an additional 30 trillion soums in budget revenues this year by introducing a “smart” control system based on digital analytics and artificial intelligence. This could be achieved through mechanisms such as monitoring P2P operations in trade and services, industry, construction, and catering, product labeling, strengthening digital control, automatically detecting undocumented cargo transportation, and formalizing informal employment.

It was noted that due to insufficient control and digitalization in markets and shopping complexes, existing opportunities in this area are not being fully utilized. Currently, more than 72,000 retail entities operate in these locations. However, over 38,000 of them report monthly turnover of less than 1 million soums, and more than 40,000 issue only two to three receipts per day. In addition, lease agreements for 12,000 retail outlets have not been registered. As a result, 37,000 entrepreneurs pay less than 500,000 soums in taxes per month.

Therefore, it was stressed that additional sources of revenue should be activated through the full digitalization of markets and shopping complexes, along with the integration of control, tax services, and digital monitoring systems.

The meeting also addressed the issue of providing services to large non-strategic taxpayers at the regional level. It was noted that 209,000 VAT payers are located far from tax authorities, which reduces the efficiency of service delivery and control. In this regard, it was proposed to transfer oversight of 500 non-strategic enterprises to the regional level and more than 103,000 agricultural, trade, and catering businesses to the district level.

Special attention was also given to simplifying tax administration for entrepreneurs. Survey results showed that most entrepreneurs are dissatisfied with the complexity of inspections, reporting, and tax payment processes. Therefore, it was proposed to transform “auto-camera” control from a punitive tool into a preventive system that detects and corrects errors early, and to classify enterprises into “green,” “yellow,” and “red” categories based on risk levels.

It was also reported that work is underway to automatically generate six types of reports without human involvement and to transition to a unified tax account. Currently, 198,000 cases of missed reporting deadlines have been recorded, and 14,700 taxpayers have been fined a total of 396.6 billion soums for failing to submit reports. Additionally, due to the large number of accounts used for tax payments, 20,000 errors have occurred.

It was noted that the introduction of the new system could reduce unjustified tax debts, overpayments, and penalties, allowing entrepreneurs to save up to 8.4 trillion soums. As a result of the new approach, the number of inspections is expected to decrease, errors in reports to decline sharply, the processing of appeals to accelerate, and the performance of call centers to improve significantly.

The presentation also highlighted that the key issue in the functioning of tax authorities is human resources. In recent years, insufficient attention to this area has led to increased staff turnover. It was noted that employee training levels remain low, the system of material incentives does not meet modern requirements, and social support mechanisms are inadequate. For example, more than 3,000 employees underwent training in 2022, while only about 700 were retrained last year.

In this regard, new proposals were presented to improve staff qualifications, establish continuous education, and strengthen material and social incentives. Measures were also outlined to enhance the material and technical base of the Tax Academy under the Tax Committee.

The head of state instructed officials to introduce a fundamentally new working model in tax administration based on digital technologies, analytics, and artificial intelligence, to create a convenient and fair tax environment for entrepreneurs, and to build a corps of highly qualified personnel.

Transforming the tax system from an inspection-based model to a service-oriented approach, improving service quality, and introducing modern and effective control mechanisms were identified as priority tasks.