Uzbekistan will reduce benefits for companies located in areas with challenging conditions.

According to the presidential decree, this will affect 20 districts in 10 regions and Karakalpakstan, which fall into the 5th category, where the business environment is considered the most challenging.

Specifically, the property and land tax rate for legal entities (excluding large taxpayers and state companies) will be raised to 50% of the assessed amount, up from the previous 1%.

Additionally, individual entrepreneurs operating in these areas will lose their exemption from income tax. They will now be required to pay taxes amounting to a quarter of the minimum rate set by the Kengash for the respective territory.

It is important to note that benefits for small businesses, based on the complexity of conducting entrepreneurial activities in different regions, were introduced under the presidential decree at the end of 2022.

Currently, in addition to changes in taxation, certain benefits remain for companies in the 5th category districts. These include: a profit tax rate, turnover tax, and social tax at 1%, guarantees for bank loans up to 2.5 billion sums, as well as compensation for part of the interest on loans and leasing agreements.

As a reminder, the same presidential decree has extended the privatization deadlines for three state banks.