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Uzbekistan shuns VAT cuts for targeted consumer VAT refunds

Central Asian state follows example of Canada and others in offering less well off VAT refunds rather than untargeted reduced rates or exemptions

Uzbekistan has introduced VAT credits on essentials supplies for low-income citizens rather than further VAT cuts or exemptions. Uzbekistan has cut VAT four times in the past few years.

To qualify, citizens must be registered on the Unified Register of Social Protection. They will be able to apply for a 12% VAT refund via a free phone app. Goods eligible for VAT refunds include: meat; eggs; butter; vegetable oil; and similar produce. The cash is then refunded to the consumer within 30 days.

Uzbekistan has decided to not offer VAT cuts or exemptions on basics, and most other countries have do as it feels they provide support to many consumers not in need. Recently, the deputy minister said that establishing differentiated rates or granting VAT exemptions is an ineffective measure to reduce the cost of goods (services), since those who consume them in greater amounts benefit from lower rates or from providing benefits quantity.


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