Uzbekistan has proposed introducing a 5% tax on interest income from bank deposits for individuals. The proposal was put forward on July 30 by the Institute for Reducing the Share of the Shadow Economy, Improving Tax and Customs Administration, and Fiscal Analysis under the Ministry of Economy and Finance during a fiscal dialogue.
According to the institute's presentation, interest on bank deposits has been exempt from tax since 1998, and today this benefit is the only type of passive income that retains such an exemption. Meanwhile, dividends are taxed at 5%, and income from property rental, royalties, and capital gains are taxed at 12%.
The authors of the proposal consider it appropriate to set a uniform tax rate of 5% on deposit interest and dividends. To this end, amendments to Article 381 of the Tax Code have been proposed.
The initiative is justified by international experience. According to the presentation, the tax on interest income from bank deposits is: 10% in Kazakhstan, Azerbaijan, and India; 15% in Thailand; 20% in Indonesia; and 26.4% in Germany. In Turkey, the rate ranges from 15% to 40%.
According to the institute's calculations, the introduction of this tax could generate additional budget revenues of approximately 1.4 trillion soums. This estimate is based on the volume of individual deposits of 170.2 trillion soums as of May 1, 2026, an average interest rate of 16%, and the proposed tax rate of 5%.
For now, this is only a proposal. No decision has been made on introducing the relevant amendments to the Tax Code.
It is worth noting that in Kazakhstan, citizens only pay tax on deposits placed in foreign banks. Deposits in Kazakh banks are not taxed.
In Azerbaijan, the basic tax rate on interest from bank deposits is 10%. However, there are a number of exemptions: income from deposits in national currency placed for at least 18 months is fully exempt from tax. For other deposits in national currency, monthly interest income up to 200 manats (about 1.4 million soums) per bank is not taxed. In other cases, including foreign currency deposits, the bank withholds 10% tax at the source.
In Germany, interest on bank deposits is treated as capital income and taxed at a basic rate of 25%. Additionally, a solidarity surcharge of 5.5% of the tax amount is levied, bringing the total rate to 26.375%. Members of registered religious communities may also be subject to an additional church tax. However, the first €1,000 of capital income per person per year (€2,000 for married couples filing jointly) is tax-exempt. Typically, the bank automatically withholds the tax unless the depositor has applied to use the tax-free allowance.
In Indonesia, interest on bank deposits and savings accounts is subject to a final income tax of 20% of the accrued income. The tax is withheld by the bank upon payment of interest. Interest on deposits with a principal amount not exceeding 7.5 million rupiah (about 5 million soums) is exempt from tax.
Source: www.gazeta.uz