TASHKENT – Podrobno.uz. Experts from the Institute for Reducing the Shadow Economy, Tax and Customs Administration Improvement, and Fiscal Analysis have proposed overhauling Uzbekistan's 1% tax cashback mechanism, introduced in 2022. They argue the system has fulfilled its primary goal but now imposes excessive budget costs with diminishing returns.
The cashback was launched alongside online cash registers and electronic invoices to encourage shoppers to demand receipts, thereby reducing the shadow economy. The institute acknowledges the mechanism successfully fostered a culture of receipt collection and increased tax transparency.
However, researchers emphasize that cashback was always intended as a temporary tool. Over four years, digital technologies—online registers, product marking, big data analytics, and AI—have become integral to tax administration, reducing the need for mass monetary incentives.
The key concern is soaring budget expenditures. In 2022, cashback payments totaled 820 billion soums; by 2026, they are projected to exceed 1.8 trillion soums. For context, the state budget allocated 900 billion soums for preschool construction this year.
Analysis reveals that in May 2026, 10.7% of all cashback payments (146.6 billion soums) went to just ten major retail chains, led by Korzinka with 6.4%. Experts argue these chains operate transparently regardless, meaning budget funds effectively subsidize already compliant transactions.
The proposed alternative is a state lottery system targeting purchases at small shops and eateries, where revenue concealment risks remain high. Prizes would include cars, travel packages, and other valuables worth over 5 million soums. Estimated annual cost: up to 100 billion soums—nearly 20 times less than current cashback spending.
Importantly, the 12% VAT refund for socially vulnerable citizens would be retained. The experts cite OECD and IMF recommendations favoring risk-based controls, automatic data exchange, and further digitalization over cash rewards.
Source: podrobno.uz