Improving Tax Administration in Uzbekistan
Although a top priority of the Government of Uzbekistan’s tax reform efforts is to draft and adopt a Revised Tax Code, the success of its reform efforts will depend in many respects on how application of the Revised Code is administered.
That, In turn, makes improving the tax administration system a particularly urgent matter, especially in terms of effective regularization of procedures for tax audits, application of penalties, as well as for reports and reporting. Flawed legislative and tax administration practices take an extremely negative toll on private sector development, investing, and employment -- thus creating a breeding ground for growth of the informal economy.
Another important aspect of improving the effectiveness of tax administration is equipping tax bodies with modern information technology to enable them to collect and process tax information with significantly greater efficiency and speed. Making greater use of information technology in tax administration practices will lower costs for businesses and the government alike while making the taxation process more transparent.
Effective tax administration is not feasible without highly qualified staff. Tax bodies’ staffs must be provided the latest knowledge and skills needed to work effectively in new conditions. Hence, the third essential aspect of improving the tax administration system is an educational component.
In order to assist the Government of Uzbekistan in tackling the challenge of modernizing the tax administration system, UNDP has launched the Improving Tax Administration in Uzbekistan Project.
The Project is designed to enhance tax administration effectiveness in Uzbekistan to facilitate:
- Lowering transaction costs for the business sector, which will translate into an increase in entrepreneurial activities;
- Developing a competitive environment (thanks to removing tax administration barriers to doing business);
- Expanding the taxable base (thanks to shrinking the informal economy) and an increasing the amount of taxes collected;
- Increasing employment and people’s real income (thanks to economic growth and stimulation of the business sector).
The project entails the following activities:
- Analysis of tax administration legal foundations and tax administration practices and development of recommendations for improving its mechanism.
- Development of a software package to enable the State Tax Committee (STC) of Uzbekistan to receive tax reporting electronically for subsequent processing.
- Upgrade of STC staff’s tax administration skills and assistance to the STC’s Tax Academy to improve its curricula and courses.
Achievements & expected results
- Provision of legal and practical tax administration advisory services to the State Tax Committee;
- Development of a computer software for e-filing of tax forms and a Web site for the Tax Committee;
- Improvement and enhancement of tax bodies performance efficiency through introducing ICT-solution into tax administration; further electrification of STC
- Ensuring STC personnel with state-of-the-art knowledge and skills in the sphere of international tax relations
- Enhancement of capacity of Tax Academy and Tax College in training and retraining of tax service personnel by developing special courses and training programmes for Tax Academy , Tax Colleges and STC..