Senators approved a law extending the zero VAT rate on imports and sales of a number of food products, including meat, butter and potatoes, until April 30. The representative of the government told how it is planned to restrain prices after April.
On February 3, the Senate of the Oliy Majlis at the 23rd plenary session approved a law on amendments to the Tax Code providing for the extension of value-added tax benefits for a number of food products.
Last year, from May 1 to the end of the year, there was a zero VAT rate on imports of vegetable oil, sunflower seeds and flax and soybeans, as well as on turnover for the production and (or) sale of vegetable oil (except cotton).
From October 10 to December 31, sales of meat (beef, lamb, chicken), live animals (livestock and poultry) and their slaughter products, potatoes and frozen fish, as well as their import into the territory of Uzbekistan were also exempt from VAT.
The law, which the president has yet to sign, extends tax benefits until April 30, 2022.
In response to the senator’s question, the head of the Cabinet of Ministers Secretariat Dilshod Kholmurodov told how the government plans to restrain price growth after April.
“Regarding what will happen after April, the government is carrying out systematic work. In early January, the Cabinet of Ministers approved a roadmap to ensure price stability in the economy in 2022. It defines a number of measures to fill the domestic market with food products during the year. In particular, in 2022, 207 thousand hectares of land will be returned to circulation, sowing will begin in March. These are additional lands on which melon crops, potatoes, vegetables, livestock feed will be grown,” he said.
In addition, if in 2021, 604 thousand hectares of land were allocated to persons from the “iron”, “women’s” and “youth” notebooks for growing agricultural products, then this year it is planned to provide another 81 thousand hectares of land.
“Due to the cultivation of additional agricultural products, it is expected to increase the volume of food production in the domestic market. This is expected to be a factor in reducing inflation and stabilizing prices,” Dilshod Kholmurodov said.
By the end of 2021, the food reserve (potatoes, vegetables and other products) has been increased by 3% in Uzbekistan – up to 645 thousand tons.
“Within a year, the next months, these products will be delivered to the domestic market, stores. Thus, measures will be taken to ensure price stability,” the government representative said.
At a meeting of the Legislative Chamber in January, Deputy Finance Minister Jamshid Abruev explained how VAT benefits affected food prices. It was reported that in 2022, due to these benefits, the state budget will miss another 800 billion soums.
Local meat producers Jizzax Organic and Promeat previously told how things are in the field of animal husbandry and meat production, what consequences and risks VAT benefits can lead to and what alternative solution they offer to prevent an increase in meat prices.
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