Challenges and Opportunities: A Qualitative Study on Tax Compliance in Pakistan
Investment climate for renew group (1)
1. OUTLINE OF UZBEKISTAN
Area: 447,400 Square
kilometres.
Slightly lager than California
Population: 31 million.
56th largest country in the
world by area.
42nd by population
5th largest country by area
3rd largest by population in
the CIS region.
3. MACROECONOMIC STABILITY AND DYNAMIC
INDUSTRIAL POLICY
GDP growth rate (in % to previous year)
7,3
9,5
9,0
8,1 8,5 8,3 8,2 8,0 8,1
2006 2007 2008 2009 2010 2011 2012 2013 2014
• GDP has increased 4.1 times during the years of
independence;
• Sustainable high rates of economic growth retain
at the level not less than 8% annually for the last
years;
• The volume of industrial output increased
3.7 times for the years of 1990-2014;
• Average annual growth rate of industrial
output has compounded 9.4% for the last 10
years, exceeding GDP growth rates.
10,8
12,1
12,7
9,1
8,5
6,4
7,9
9,6
8,1
2006 2007 2008 2009 2010 2011 2012 2013 2014
Industrial Productiongrowthrate
(in % to previous year)
4. DECREASE OF TAX BURDEN
For the past years the aggregate tax burden decreased by almost 3 times. Moreover the Government
provides additional tax incentives for exporters, small business enterprises and companies engaged
in new investments and starting production of new goods and products
Taxes
Tax rates
in 2014
Legal entities income tax 8%
Individual income tax 7.5%-22%
Value added tax 20%
Single social payment 25%
Single tax payment for
small enterprises
6% (in
industry -
5%)
30.2
23.2
21.9
20.5 20
Dynamics of decreasing tax burden
(in % to GDP)
2005 2008 2011 2013 2014
5. DIVERSIFICATION OF THE ECONOMY
• Share of Industry in GDP
increased from 14.2% to
31.1%; and ensured
diversification of industrial
sectors ;
• Share of Agriculture in GDP
decreased from 30.1% to
12.8% whereas high rates of
its growth retained (average
6,6% annually);
• Labor productivity increased
1.85 times;
• The productivity of crops
increased 1.7 times on
average.
14,2
31,1
30,1
12,8
6,0
2,1
49,7
54,0
2000
2014
Industry Agriculture Others Services
Fuel &
Energy:
23.2%
Ferrous and
non-ferrous
metallurgy:
11.8%
Chemical and
petrochemical
5.4%
Machinery:
19.8%
Light
Industry:
14.2%
Foodstuff:
13.2%
Other sectors:
12.3%
GDP structure (in %)
Industrial Sector Structure (2014)
8. SHARE OF SMALL BUSINESS IN GDP
AND INDUSTRY (%)
34,6 35,6
42,1
48,2
52,5 54,6 55,8 56
15,4
11 10,9
14,6
18,8
22,2 23
31,1
2002 2004 2006 2008 2010 2012 2013 2014
GDP Industry
9. EXPORT INDICATORS
(in billion USD)
0.4
3.3
5.4
13
14.1
1990 2000 2005 2010 2014
Export volume for the period 1990-2014
has increased more than 30 times
Share of finished products in export
increased from 30% to 76%
Over the past 10 years export of high
value-added products sharply increased,
including:
– automobiles – 12 times,
– yarn – 4.4 times,
– complex fertilizers – 11.3 times.
10. ACHIEVEMENTS OF THE REPUBLIC OF UZBEKISTAN ON
IMPROVING BUSINESS ENVIRONMENT
• Rating of Uzbekistan on “starting business” indicator has improved to 69
positions among 189 states of the World according to the World Bank project
“Doing business - 2014” as a result of easing the business registration
procedure for entrepreneurship activities;
• Uzbekistan has become the only country in Central Asia which entered in 2013
among top-20 countries of the world with the best perspectives for business –
the research of the Maplecroft - British consulting company;
• Uzbekistan has ranked 11-th among 26 the most rapid developing countries of
the world – the research of HSBC bank “The World in 2050”;
• Uzbekistan entered among top 5 countries with the most rapidly growing
tourism sector for 2013 – the research of the World Travel & Tourism Council.
11. MEASURES TAKEN TO IMPROVE THE BUSINESS
ENVIRONMENT AND PROVIDE GREATER FREEDOM FOR
ENTREPRENEURSHIP IN UZBEKISTAN
Measures Results
Indicators of the top
ten countries according to the
report
"Doing Business"
Reducing the number of procedures for the
registration of new enterprises
3 procedures 1-3 procedures
Reducing the time spent on the registration of new
enterprises
from 14 to 4 days 1-13 days
Reducing the initial costs of creating new enterprises 0% of income per
capita
0-25% of income per capita
Reducing the number of procedures for registering
property
1 procedure 1-7 procedures
Reducing the time spent on the registration of
property
7 days 2-38 days
Reducing the number of tax payments 7 payments 3-29 payments
Reducing the number of documents for export 4 documents 3-7 documents
Reducing the number of documents for import 5 documents 3-5 documents
12. 1. Political & macroeconomic stability
3. Rich raw material base
4. Diversified industrial base
5. Advantageous geographical location
6. Well educated human resources
2. Sound legal base
FACTORS OF SUCCESS IN UZBEKISTAN
13. RICH RAW MATERIAL BASE
Uzbekistan possesses unique resources:
Solid raw materials, including
ferrous and non-ferrous
Over 1644 of deposits and
100 sorts of mineral resources
14. WELL EDUCATED HUMAN RESOURSES
65 universities
and institutions
850 directions
Inha University of Korea
Westminster International
University
Singapore Institute of
Management Development
Turin Polytechnic Institute
Oil&Gas Institute named after
Gubkin
Moscow State University
Russian Economic University
named after Plekhanov
16. Stipulates transfer of 1247 enterprises and facilities into
Private Ownership, including:
– State-owned Shares in 68 enterprises - offered to Foreign
Investors;
– State-owned Shares in 343 enterprises - subject to be put
onto sales for their purchase by Foreign and Domestic
Investors;
– 512 State-owned Facilities - offered to Foreign and Domestic
Investors at a “Zero” Purchase Price with Undertaking
Investment Obligations;
– 324 Facilities - offered to Sale through the Public Auctions to
Foreign and Domestic Investors.
STATE PROGRAM ON PRIVATIZATION OF
LEADING ENTERPRISES OF UZBEKISTAN
18. DECREE OF THE PRESIDENT OF UZBEKISTAN
«ON ADDITIONAL MEASURES TO STIMULATE TO
STIMULATE ATTRACTING OF FOREIGN INVESTMENTS»
I. For all regions of Uzbekistan (except Tashkent
region and Tashkent city)
II. Tax and obligatory payments exemption:
Period of Tax Exemptions :
3 years, if amount of direct investments is 0,3 - 3 mln. USD;
5 years, if amount of direct investments is 3 - 10 mln. USD;
7 years, if amount of direct investments is more than 10 mln.
USD.
19. FREE INDUSTRIAL ECONOMIC ZONE “NAVOI”
DEGREE OF THE PRESIDENT OF THE REPUBLIC
OF UZBEKISTAN DECEMBER 2, 2008 No.UP-4059
Territory - 564 ha
Distance between Navoi
- Tashkent – 490 km
- Samarkand – 153 km
- Bukhara – 110 km
21. TAX PRIVELEGES
Navoi FIEZ residents are exempted from:
Land tax - app.1500 USD for 1 ha
Property tax - 4%
Profit (income) tax - 7,5%
Single tax (for SMEs) – 5%
Social infrastructure development tax – 8%
Obligatory payments to the Republican Road Fund
(1,45%) and Republican Fund of Elementary and
Secondary Education (0.5%)
22. TERMS OF PRIVELEGES AND INCENTIVES
7 years if amount of direct investments is from 3 mln to
10 mln. Euro
10 years and 50% reduction of profit tax for the
following 5 years if amount of direct investments is
from 10 mln to 30 mln. Euro
15 years and 50% reduction of profit tax for the
following 10 years if amount of direct investments is
more than 30 mln. Euro
23. CUSTOMS EXPEMPTIONS
For the whole period of functioning enterprises are
exempted from customs duties for imported:
Equipment
Raw materials
Production components
100 % for goods aimed to exports
50 % for goods aimed to domestic market with delay
of payment period up to 180 days
24. REC TIME LLC PLAN TO ATTEND
KEY EXHIBITIONS
• Specialized Exhibition-Fair of Mini technologies
and Compact Equipment for Agriculture
Uzbekistan “Agrominitech Expo”
•International Industrial Fair and Cooperation
Exchange
• International Uzbek Cotton and Textile fair
