Business rights are a priority of the New Uzbekistan



Since 2017, Uzbekistan has put forward cardinal, unexpected and favorable changes for entrepreneurs. The peculiarity of these changes is that they were aimed at reducing the control functions of the state and opening the way to the free conduct of business. All barriers that hindered entrepreneurs at that time were gradually eliminated.

Liberalization of punishment against entrepreneurs, elimination of possibilities of unjustified interference in their activities, strengthening of close diplomatic ties with foreign countries, simplification of export-import procedures - all this gave a powerful impetus to the development of business environment and motivated entrepreneurs to develop and actively expand their business without obstacles.

In particular, all types of unscheduled inspections and counter-inspections of the activities of business entities, including criminal cases, were canceled. A mechanism of putting forward a moratorium on inspections conducted in the activities of entrepreneurs was introduced, which is actively used to this day.

The measure of criminal punishment in the form of deprivation of the right to carry out entrepreneurial activities was abolished.

Since 2017, the Business Ombudsman, created on the initiative of the head of state himself, has been functioning effectively. Reporting to the President, it makes proposals to improve the business environment in the country and remove various obstacles to the development of entrepreneurship.

Uzbekistan is not resting on its laurels. The country has set itself big goals - to bring the share of the private sector in GDP to 80% and the share of the private sector in exports to 60% by 2027.



The president's dialog with entrepreneurs is the key to solving many problems



It is important for every entrepreneur to be listened to in case of difficulties or obstacles in his/her activity. This is especially important if the problem requires the intervention of government officials.

Obviously, in the conditions of economic development of the state there are problems that create difficulties for business. They require prompt intervention from the highest authorities in order to prevent stagnation in the development of this or that industry, as well as to give an impetus for further development.

Such a peculiar impetus was the dialog of entrepreneurs with the President, which is held annually, and entrepreneurs have the opportunity to communicate directly with the head of state.

The opportunity to be heard is given to every entrepreneur in every region of the country through meetings. After analysis and generalization, the most relevant and justified proposals are submitted to the head of state for appropriate decisions. In addition, the proposals and complaints of hundreds of entrepreneurs are listened to on a day of open dialog.

Over the past three years, more than 33 thousand appeals and proposals were received from entrepreneurs during the open dialogs. As a result of the dialogs, more than 150 initiatives were put forward to remove obstacles in the development of entrepreneurship, as well as its further development.

In particular, if we analyze the initiatives put forward after the 2021 Dialogue, the reforms were aimed at mitigating the effects of the pandemic, extending tax and customs exemptions and granting deferral of taxes and mandatory payments.

The 2022 Dialogue stood out for the support of business representatives on various fronts, starting with tax reforms such as reducing VAT percentages to 12 percent, shortening the VAT refund period to 7 days, and introducing a flat tax rate of 4 percent instead of the current sales tax ranging from 4 percent to 25 percent.

In addition, the mechanisms for ensuring the rights of entrepreneurs have been expanded by introducing a procedure for canceling the decision to allocate land plots or property only in court.

As a result of the dialog, another problem that worried entrepreneurs was eliminated, concerning the application of higher tax rates due to the non-use of an empty building or land plot. This mechanism was not only canceled, but also debts of entrepreneurs in the amount of 2 trillion soums formed as a result of payment of taxes at the increased rate were written off.

Last year, as a result of the dialog, the mechanisms of financing entrepreneurship were radically revised, the Business Development Bank was established, and tax reforms aimed at protecting the rights of entrepreneurs were introduced.

It has become a tradition for entrepreneurs to look forward to the date "August 20 - Entrepreneurs' Day" every year. It is on the eve of this day that new initiatives to support business are announced in the course of dialog.
Digitalization of business protection as a guarantee to ensure unjustified interference in the activities of entrepreneurs



One of the topics of most concern to entrepreneurs is the topic of inspections. In this area, it is important to ensure the protection of entrepreneurs.

Digital monitoring of inspections conducted in the activities of entrepreneurs by state bodies is carried out by the Business Ombudsman.

The information system "Unified State Control" allows registering inspections carried out in the activities of entrepreneurs, their results, as well as filing complaints in case of violations by the inspecting authorities.

State bodies are prohibited from conducting inspections without registering them in this system. Otherwise, this will serve as grounds for administrative liability.

In order to ensure the transparency of inspections and the rights of business entities, the new system "Unified State Control" provides full access for business entities as well.

Thus, in the new system "Unified State Control" a number of functions have been added, such as the Electronic Book of Registration of Inspections, which provides full oversight of inspections by the Authorized Body.

In order to combat corruption and illegal inspections in the system "Unified State Control" was made an electronic database of all officials with the right to conduct inspections This in turn eliminates the possibility of falsification of data of the certificate with the right to conduct inspections. Entrepreneurs can check the data of the special license of inspectors and in case of non-compliance with the system have the right not to allow them on their territory.

Moreover, registers of state control functions and mandatory requirements have been compiled for business entities, which provides an opportunity to familiarize with the control functions of state inspections and mandatory requirements in relation to them.

As a result of the introduction of the "Unified State Control" system, it has become much easier for the Authorized Body to identify facts of offenses in the state control.



Strategy "Uzbekistan - 2030" - prospects for business development in the future



Uzbekistan does not stop at what has been achieved. Rapid steps to further support the business sphere are also enshrined in the Strategy "Uzbekistan - 2030".

Efficient use of local raw material base and development of industry based on advanced technologies, consistent transfer of monopolistic spheres to market principles, increasing the share of private sector in the economy, creating the most favorable conditions for free activity of entrepreneurs are still a hot topic.

In addition, full digitalization and simplification of the tax system is planned, as well as the creation of equal opportunities for all entrepreneurs to make the official sector preferable and more profitable than illegal activities.

For this purpose, a simplified and compact legislative system will be created, convenient for the population and business entities.



Dilmurod Kasimov,

authorized to protect the rights and legitimate interests

business entities

The website of the World Trade Organization stated that Uzbekistan remains unwavering in its commitment to become a member of this structure and all opportunities are being used to achieve this. The Republic intends to join the World Trade Organization before the 14th Ministerial Conference to be held in Cameroon in 2026. Also at the eighth meeting of the working group on Uzbekistan's accession to the WTO, the efforts of our country in this direction were highly appreciated. At the same time, the areas where measures need to be taken have been highlighted.
Within the framework of the international division of labor, the development of national economies has seriously reduced its priority by the 21st century. Today, the high level of technological development, the world economy based on global competition and the trend towards progress based on digitalization have made it necessary for any national economy to develop on the basis of international trade. It has become obvious that no country can develop without entering into international trade relations.
Therefore, a presidential decision on additional measures to accelerate the process of Uzbekistan's accession to the World Trade Organization was adopted on 2 June 2023, in which Uzbekistan's membership in that organization is noted as an important task for the near future.
The member States of the World Trade Organization conduct international trade on equal terms. In this regard, an Interdepartmental Commission on work with the World Trade Organization was formed under the chairmanship of Deputy Prime Minister Zhamshid Khodjaev. It is entrusted with the task of clearly defining our country's position on market access, as well as making decisions on foreign trade regime through changes in tariff and non-tariff measures in the process of bilateral and multilateral negotiations with WTO member states. The aim is to consider proposals prepared by the Ministry of Justice, relevant ministries and agencies on harmonization of national legislation with WTO agreements, rules and regulations and to take decisions on their implementation in national legislation.
Over the past period, the Commission has implemented a number of measures. In particular, Uzbekistan adopted the Act on amendments and additions to certain legislative acts of the Republic of Uzbekistan providing for the harmonization of national legislation of the Republic of Uzbekistan with the agreements of the World Trade Organization, on the basis of which amendments and additions were made to the Act on inventions, utility models and industrial designs, the Act on trademarks, service marks and appellations of origin, the Act on advertising, the Act on medicines and pharmaceutical activities, and the Act on the use of medicines and pharmaceutical products. As a result of amendments and additions to the Law "On State Duty" alone, in accordance with the requirements of the WTO General Agreement on Trade in Services, the amount of state duty for state registration of enterprises with foreign investment and local enterprises has been unified and set at one times the basic calculation value. In general, according to the Ministry of Justice, after the process of Uzbekistan's accession to the WTO entered an active stage, during 2023-2024 a total of 24 regulatory legal acts were adopted and about 40 documents were agreed upon in order to bring the national legislation in line with the agreements and procedures of the organization.
The negotiating team for Uzbekistan's accession to the World Trade Organization announced the signing of market access protocols with three countries - Japan, Israel and the Dominican Republic - and the completion of negotiations with Thailand on the sidelines of the 13th WTO Ministerial Conference held in Abu Dhabi from 26-29 February. As of March this year, the Uzbek government has finalized negotiations with 11 states as part of its accession. Of these, nine are protocols to finalize market accession negotiations.
As this article is being prepared, another bold and extremely important step in this direction has been taken. The Decree of the head of state "On regular measures on further acceleration of market reforms and bringing the national legislation of the Republic of Uzbekistan in line with the agreements of the World Trade Organization" dated June 3, 2024 was published.
The Decree abolished from January 1, 2025:
- the right of JSC "Uzmetkombinat" to procure (purchase) scrap and waste of ferrous metal on the territory of the Republic;
- the right of JSC "Uzvtortsvetmet" to procure and export scrap and waste of non-ferrous metals on the territory of the Republic;
- the right of JSC "Uztrade" to ship food flour and wheat, as well as products of small businesses and private entrepreneurship, dekhkan and farms for export without providing a bank guarantee or insurance policy of export contracts against political and commercial risks to trading houses on consignment terms;
- the right of a single agent of "Uzkimyoimpex" LLC in the implementation of export of chemical products of the organizations of "Uzkimyosanoat" JSC, as well as import of equipment, spare parts, components, raw materials for their production needs.
From July 1, 2026:
- The right of UzGasTrade JSC as a single exporter and single operator to purchase centrally through imports from external sources of natural gas;
- the right of Uzenergosotish JSC to carry out centralized export and import of electric energy.
And also from January 1, 2025 telecommunication operators with mobile and (or) wire telecommunication networks, operating in the territory of Uzbekistan, as an experiment are granted the right to direct connection to international Internet networks for their own commercial needs with full compliance with the requirements of operational and investigative activities, information and cyber security systems.
These measures are aimed at eliminating the monopoly in Uzbekistan in a number of areas. We believe that the elimination of monopoly in the Internet alone will itself make a huge contribution to accelerating the development of the digital economy in addition to healthy competition.
If the monopoly of the automotive industry in Uzbekistan is also abolished as the next step in this direction, it would accelerate accession to the World Trade Organization. In the automobile industry, although plants operate in Andijan, Samarkand, Khorezm, Jizzak, and Syrdarya oblasts, they still operate under some level of ownership and control of Uzavtosanoat JSC.
As noted above, trade between member states of the World Trade Organization is based on equal terms. There are still a number of issues to be resolved concerning tariff and non-tariff equality of the foreign trade regime, compliance of national legislation with the agreements, rules and norms of the WTO.
Since membership in the World Trade Organization is based on the uniformity of foreign trade procedures, one of the first issues to arise is to prevent the use of privileges in the financial support of producers. For privileges in any industry undermine healthy competition by providing an advantage to a certain category of business. This is contrary to the rules of the World Trade Organization.
In recent years, the practice of allocation of subsidies from the State budget to businesses and companies has significantly expanded in our country. The fact that subsidies are also provided to enterprises that need to independently seek financial resources to make profit, and some joint stock companies also channel them to the authorized capital, has really strengthened the dependent sentiments. Thus, over the past two years, the volume of subsidies allocated from the State Budget has increased from 5.63 trillion soums to 29.25 trillion soums, i.e. five times. It is no secret that this is the reason for the increase in the state budget deficit. And as it is known, any subsidy falls on the shoulders of other taxpayers. In general, since the subsidy contradicts the principles of market economy, it itself also does not comply with the rules of the World Trade Organization.
Based on the fact that benefits for business and business entities should be sharply reduced in connection with membership in the World Trade Organization and strictly regulated, one can only positively assess the following:
- from October 1, 2024 to April 1, 2025, Uzbekistan plans to phase out the practice of granting discounts for railway transportation within the country;
- abolition of privileges and preferences granted to domestic producers during procurement by corporate customers regulated by the current legislation, including preferences for domestically produced goods in the amount not exceeding 15 percent of the DDP (Uzbekistan) price of imported goods, as well as price preferences of up to 20 percent for domestically produced electrical and electrical household products from July 1, 2026;
- abolition of subsidies and preferences provided to support exports from January 1, 2025, including benefits for partial reimbursement of profit tax on income received from the sale of goods (services) for export, turnover tax, transportation costs, as well as support measures not prohibited by WTO rules;
- abolition of inefficient tax and customs privileges from January 1, 2025.
In addition, one of the important measures on the way to compliance with the agreements of the World Trade Organization is the issue of phased unification of tariffs for export-import services: excise tax rates for tobacco products will be introduced until January 1, 2026, and for alcohol and sugar until January 1, 2027.
In order to bring the existing customs duties, fees and costs in the country in line with the requirements of the General Agreement on Tariffs and Trade of the WTO (GATT 1994), it was instructed to establish that from January 1, 2025, the customs duties introduced are not levied for fiscal purposes. This means that liberalization of the economy will be a major focus.
In general, the protection of local producers through high customs duties, i.e. the relaxation of protectionist policies, is important to achieve the objective. In this case, it is necessary to ensure that domestic producers adapt to global competition by gradually reducing customs duties until they become members of the World Trade Organization. Otherwise, upon accession to the WTO, the sudden introduction of customs duties in the practice of member states will cause the inability to face global competition.
Since WTO activities and membership in the organization are based on free trade and healthy competition, Uzbekistan's business entities should start preparing for such a procedure today. Introduction in 2024 of new restrictions on import of cars (including electric cars), import of elevators, as well as complication of import of household appliances, establishment of minimum export prices for a number of goods seem to return to the closure from the global market. And if such procedures contradict the provisions of the World Trade Organization, they should be abolished.
Special emphasis on large-scale privatization in Uzbekistan will ultimately serve the active development of the private sector. In this regard, the implementation of two presidential decrees adopted on April 19, 2024 "On additional measures to reduce state participation in the economy" and "On measures to transform and accelerate the privatization of large enterprises with state participation" is of great importance.
It should be noted that Uzbekistan's large-scale efforts to join the World Trade Organization are important for increasing the competitiveness of the national economy along with business development. Most importantly, people's well-being is improving through the consumption of quality products.
Samariddin Elmirzaev,
Head of the Department of the Banking and Finance Academy of RUz, Professor, Doctor of Economic Sciences