WTO accession gives Uzbekistan the right to trade on equal terms – Kuchkarov

WTO accession gives Uzbekistan the right to trade on fair and equal terms. Deputy Prime Minister and Minister of Economy and Finance Jamshid Kuchkarov made a statement about this today, November 26, at a meeting of the Legislative Chamber of the Oliy Majlis.  

At the meeting, MP Adham Nazirkulov asked how the abolition of profit tax and turnover tax exemptions on income from the sale of goods (services) for export in the draft law on the 2025 state budget will affect the country's export potential.  

The Deputy Minister of Investments, Industry and Trade, Khurram Teshaboyev, initially answered the question, saying that on June 3, a Presidential Decree was adopted to harmonize national legislation with the rules of the World Trade Organization, and that the document provides for the abolition of privileges on profit tax, turnover tax, and partial reimbursement of transport costs on income from the sale of goods (services) for export from January 1, 2025.  

“You are right, according to the analysis, this privilege was one of the main factors in the growth of export rates at a number of enterprises… This privilege also contributed to the expansion of the geography of exports,” says Khurram Teshaboyev.  

He said that the application of this measure could have certain consequences for the activities of exporting enterprises, increase the need for working capital, and thereby reduce the volume of exports.  

Khurram Teshaboyev also said that a number of measures are being taken to mitigate the negative consequences of the abolition of privileges, including work is being carried out to develop the factoring services market due to the increased need for working capital.  

Jamshid Kuchkarov noted that 972 billion sums in profit tax benefits were provided in 2022 and 1 trillion 100 billion sums in 2023. The turnover tax benefits were provided in a relatively small amount: 12 billion sums in 2022 and 14 billion sums in 2023.  

“Taking into account the questions asked last time, I would like to express my opinion. The WTO is, in general, a fair trade system. There is inequality between WTO members and non-members. That is, if we trade with any developed country, they have the right to demand from us conditions that are always moderate or favorable for themselves, I do not mean preferences here,” he says.  

The Deputy Prime Minister noted that some WTO member countries have imposed import duties on Uzbekistan that they have not imposed on any other country.  

“Whether it is wrong or not, we can only consider in bilateral negotiations. It may or may not do [what we asked]. But if we were also a WTO member, they would not be able to take measures aimed at restricting our exports,” he says.  

The Minister of Economy and Finance, in short, emphasized that joining the WTO gives Uzbekistan the right to trade with other countries on fair and equal terms.  

“Accession to the WTO will allow Uzbekistan to trade with other, primarily developed, rapidly developing countries on fair and equal, parity terms. Someone may lose. But, in my opinion, the WTO is a fair trade regime. Therefore, every Uzbek entrepreneur should learn to conduct their business activities in conditions of fair and open competition. Given that the majority of countries in the world are members of the WTO, we need to become a member of this organization so that we can trade fairly and equally with them,” he says.  

We recall that earlier this month, Uzbekistan completed bilateral negotiations with the United States on joining the World Trade Organization. Currently, the parties are preparing to sign a protocol on market access. This will make the United States the 21st country to complete bilateral negotiations with Uzbekistan on joining the World Trade Organization.