Business Proposes Separate VAT Threshold for Marketplaces in Uzbekistan

Tashkent, Uzbekistan (UzDaily.com) — 

A proposal to introduce a separate value-added tax (VAT) threshold for sellers operating on online marketplaces was discussed on May 18 at an interim meeting of the Foreign Investors Council under the President of Uzbekistan.

A representative of Uzum said the current system requires businesses to register for VAT once their annual revenue reaches 1 billion soums. According to him, this model creates an imbalance between online and offline trade, as entrepreneurs operating in both formats reach the threshold faster due to the higher transparency of digital sales.

It was also noted during the discussions that some offline retailers may underreport revenue, which, according to participants, distorts market incentives and discourages businesses from operating through online marketplaces.

In response, a proposal was put forward to introduce a separate VAT threshold for online commerce, as well as a progressive taxation scale that would increase in line with revenue growth. As part of the initiative, Uzum suggested raising the VAT registration threshold for marketplace sellers from 1 billion to 5 billion soums. A differentiated tax rate that increases proportionally with turnover was also discussed.

Deputy Chairman of the Tax Committee Alimzhan Faizbaev said that the issue of revising the threshold set in 2019 is currently relevant and is being discussed with consideration of international practices and proposals from the business community. He emphasized that the initiative is particularly important for the e-commerce and marketplace sector.

According to the Tax Committee representative, the authority is ready to further develop the proposal in cooperation with businesses and other stakeholders.