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ISSUES OF IMPROVING VALUE-ADDED TAX ADMINISTRATION IN
REGULATING THE ECONOMY OF UZBEKISTAN
Matkarimov Dilshodbek Ilxomovich
Independent Researcher at Tashkent State University of Economics
https://orcid.org/0009-0000-1696-3205
https://doi.org/10.5281/zenodo.15754298
Abstract:
Studying the administration of value-added tax in our country is
also related to the improvement of value-added tax. The article analyzes the
specific features of calculating the value-added tax base, some complications and
problems in its determination, and focuses on issues of improving the formation
of the tax base. In addition, based on the results of the changes and additions
made in determining and calculating the value-added tax base, appropriate
conclusions were formed and recommendations were developed.
Key words
: value added, value added tax base, tax, budget policy, budget,
tax administration, tax potential, regulatory analysis, tax burden, tax reporting,
tax revenues, tax benefits.
Introduction:
In the period of rapid development of the use of digital
technologies in the economy, technical and technological renewal of production
in our country, support of high-tech processing directions, formation of a
competitive environment for economic sectors, achievement of competitiveness
of national goods in domestic and foreign markets, export reforms aimed at
ensuring the stability of the national economy by diversifying its composition
and geography, as well as expanding the export potential of the regions, have
become more active.
Value Added Tax (VAT) is a key component of modern tax systems
worldwide, providing governments with an important source of revenue and
influencing economic decisions. Its introduction and development in different
countries are influenced by many socio-economic factors, political reasons, and
international trends. In the case of Uzbekistan, the introduction of VAT is an
important stage in the country's financial history, which is closely related to the
direction of overall economic development. Our study aims to study the
emergence of VAT in Uzbekistan, its implementation and problems, as well as
subsequent reforms. By analyzing the process of VAT introduction in
Uzbekistan, this study aims to reveal its impact on the economy, its effectiveness
in generating revenues, and its importance in creating tax and budget policy.
The development of the value-added tax (VAT) system in Uzbekistan has
been influenced by both domestic reforms and international experience, which
indicates a stable growth in its fiscal policy. The formation of the VAT system in
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the country and its effectiveness have occurred as a result of global factors and
local changes aimed at improving the tax system. An analysis of European
countries shows that, despite the relatively low VAT rates, Uzbekistan has
achieved effective reforms aimed at easing the economic burden. The VAT
system of Uzbekistan has changed, adopting the successful experiences of other
countries, to reduce disparities in the tax collection process and transition to a
more equitable and sustainable tax system. Uzbekistan's VAT policy has been
shaped primarily by reforms implemented under the influence of international
practices in order to ensure sustainable economic growth. Some specific
features of tax rates are noted in terms of improving the system for collecting
value-added tax in the economy. Firstly, in a market economy, taxes serve not
only as the main source of state budget revenues, but also value added tax is an
important tool in state management of the economy and financing of priority
sectors. In order to bring the country's economy to sustainable growth, it is
necessary to improve the mechanisms for collecting value added tax, since this
tax accounts for approximately 50 percent of state budget revenues. Therefore,
great attention is paid to improving the tax system in the country. Secondly, one
of the problems inherent in indirect taxes is the high tax rates, and reducing it to
10 percent instead of 15 percent would be desirable for enterprises to stimulate
entrepreneurship.
Value Added Tax (VAT) plays a significant role in Uzbekistan as a key fiscal
instrument. Recent measures are aimed at improving the VAT collection
mechanism and increasing the number of business entities. Work is underway to
increase the competitiveness of the national economy by reducing tax rates,
while increasing VAT revenues without placing an excessive burden on
taxpayers. The tax administration, using foreign experience, has implemented
improvements aimed at solving local problems in tax collection and compliance.
This, in turn, is part of a comprehensive reform aimed at ensuring the stability of
state budget revenues. The VAT system in Uzbekistan is developing steadily, and
important reforms are being implemented to increase the efficiency and fairness
of the tax collection process, as well as to support the country's economic
growth in accordance with international experience.
Speaking about the history of the emergence and development of value
added tax (VAT), the following can be noted. VAT was invented in Germany at
the beginning of the 20th century by Wilhelm von Siemenson (1855–1919) and
is considered one of the youngest types of taxes. However, his idea was not
immediately put into practice. Later, in 1954, steps were taken in France by
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Maurice Loret to introduce a new tax system. Maurice Loret, as Director of the
Tax Department of the French Ministry of Economy, Finance and Industry in
1954, is known as the "author" of VAT. Initially, this new tax was tested in the
French colony of Côte d'Ivoire and, after being considered successful, was
introduced in France in 1958. Later, by the end of 1972, all countries of the
European Community were required to apply VAT to economic entities
operating on their territory.
Today, value added tax (VAT) is recognized as one of the most important
indirect taxes in Europe. All EU members have introduced this tax and it is
included in its mandatory provisions. At the same time, for new members
wishing to join the EU, the introduction of the VAT system is an important
condition for joining the EU. Such widespread use of VAT is justified by several
reasons. First of all, one of the biggest advantages of VAT is that this tax is added
to the price of a product or service at each stage of production and distribution,
and as a result, the exact tax liability of the product is clearly indicated. This
avoids the problem of double taxation and the revenue is calculated accurately
at each stage. This, firstly, increases the efficiency of the tax and aligns the tax
burden for producers and consumers. This tax system allows you to collect tax
on goods or services that are not directly identified in the production process,
which eliminates cases of repeated tax payments. Secondly, another important
advantage of VAT is its impact on export and import taxes. In export
transactions, goods and services are exempt from VAT, which increases the
competitiveness of national producers in foreign markets. Imports are subject to
VAT along with the tax, which protects the internal market and gives an
advantage to local producers. This practice helps to eliminate internal fiscal
borders within the European Union and ensure a level playing field in the
European market. This strengthens economic cooperation between members
and ensures the stability of the common market.
As A. Smith (1773) noted, “the income of the sovereign, who rarely supports
other workers except through taxes, is increased only by the capital of the
people supporting productive labor.” In Russia, the value-added tax (VAT) was
introduced in 1992, and this process led to a number of irregularities. Initially,
after the introduction of VAT, problems arose in economic activity. However,
over time, these irregularities gradually changed; many began to learn to work
with VAT, and after a year or so, there were no serious problems with the
application of this tax. During the period of growth of the Russian economic life,
the value-added tax began to find its place in the market. Nevertheless, buyers
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were cautious in paying the 28% tax added to goods. At the same time, buyers
were reluctant to accept this innovation, since many people perceived the
payment of such a tax as an unexpected burden. This situation also prompted
economic analyses to study how the tax paid by buyers would affect economic
development. The introduction of VAT was carried out in the early 1990s, at a
time when economic problems were intensifying in Russia, based on
international experience. This tax was, of course, necessary to ensure the
financial stability of the state. However, at the beginning of this process, one can
talk about certain difficulties and resistance. Buyers in many cases were
skeptical about the increase in VAT, since this tax could lead to an increase in
prices for them. Especially during the introduction of VAT, the relationship
between the state and the public was complicated, and instead of helping the
state to maintain its financial stability, it often caused doubts and protests. After
a year of VAT implementation, when the problems were eliminated
spontaneously, the issue of consumers' willingness to accept additional
payments from the tax became relevant. As a result, the process of introducing
VAT led to significant changes in the Russian economy. This tax not only
increased the state's financial revenues, but also served to develop economic
awareness among the population. This process also contributed to the
diversification and stabilization of the economy. However, people's attitudes and
their actions are always changing in accordance with the supply and demand of
a market economy. Therefore, the effective application and implementation of
VAT is necessary for each country to have its own characteristics, as well as to
strengthen dialogue with the public, and further improve tax policy. During this
process, the correct understanding and information about taxes among the
population plays an important role in accelerating economic growth in general.
Conclusions and suggestions.
In order to reduce the cost of products and increase competitiveness among
consumer goods, tax payers should be treated on the basis of the principle of
fairness, in the event that a benefit is applied to one type of consumer good, the
benefits are also applied to the products that make up its composition, directly
in the society. it is appropriate to take into account the fact that the benefits will
be implemented and the prices of consumer goods will be significantly affected.
List of used literature:
1.
Code (2020) Tax Code of the Republic of Uzbekistan - Tashkent: Gafur
Ghulam Publishing House. - 640 p.
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2.
Sabine Freizer tomonidan “O‘zbekistonda soliq ma’muriyati islohoti va
fiskal
nazorat”:https://documents1.worldbank.org/curated/en/
542691624154434845/text/Uzbekistan-Tax-Administration-Reform-Project.txt
3.
Tigran
Poghosyan
va
Evgeniya
Kolomak
(2013)
https://www.files.ethz.ch/isn/139068/643172_sa231.pdf
4.
Mohammad Alizadeh, Masoume Motallabi. (2016) Studying the Effect of
Value Added Tax on the Size of Current Government and Construction
Government. // Procedia Economics and Finance. Volume 36,. Pages 336-344.
