Uzbekistan’s Entry into WTO Includes Transition Period for Economic Shift
Uzbekistan Prepares for Transition Period as it Joins the WTO
Uzbekistan is gearing up for a transition period of two to three years as it prepares to join the World Trade Organization (WTO). Mubin Mirzaev, Deputy Head of the State Tax Committee, announced that this phase is crucial to minimizing any negative impacts on large enterprises as the country aligns its trade and tax regulations with international standards set by the WTO.
Mirzaev outlined key legislative changes that will accompany Uzbekistan’s WTO accession during a session at Debate Hall focused on entrepreneurship. One significant adjustment will be the equalization of VAT and excise tax rates for both domestic markets and imports. Furthermore, the preferential tax rates and benefits currently enjoyed by local enterprises will gradually be phased out, while no new tax advantages for imports will be introduced. Customs duties will be determined based on agreements with other WTO member states.
The Deputy Head of the State Tax Committee acknowledged that while these changes may present challenges for large enterprises, they are favorable for small businesses as they enhance competition and ease the process of doing business.
The transition period is designed to lessen the impact of removing tax benefits that were initially put in place to support domestic production. Negotiations with other countries will determine the duration of this period, which is estimated to last between two to three years.
Despite the challenges posed by the WTO accession process, including heightened competition, Mirzaev emphasized the positive outcomes it will bring. Currently, Uzbekistan faces high tariffs on its export goods, limiting its market expansion. WTO membership is expected to decrease these barriers, opening up new opportunities for Uzbek exports.
President Shavkat Mirziyoyev highlighted the importance of WTO membership as a pivotal part of Uzbekistan’s reform agenda during discussions with business leaders in August. He underscored that protectionist policies are hindering the country’s growth potential and that joining the WTO is a crucial step towards economic advancement.
In conclusion, while the reforms accompanying Uzbekistan’s WTO accession may have varying impacts on different industries, overall, they are anticipated to have a positive effect on the economy.
