The VAT rate on agricultural products will be reduced to zero
Uzbekistan
Starting January 1, 2026, farmers and dehqans in Uzbekistan will be exempt from paying value-added tax when selling their own produce. The measure is expected to bring the agricultural sector out of the shadow economy and allow producers to retain billions of soums.
In recent years, major reforms have been carried out in agriculture: cotton and grain areas were reduced, 160,000 hectares of orchards and vineyards were established, and over 1,500 food production projects worth $1 billion were implemented.
Nevertheless, the shadow economy still holds a significant share in the sector. Currently, a 12 percent VAT rate applies to food sales.
During an open dialogue with entrepreneurs, President Shavkat Mirziyoyev instructed responsible bodies to reduce the tax burden on farmers and dehqans. With the participation of the International Monetary Fund and local as well as foreign experts, proposals were developed to legalize agricultural operations.
Under the new framework, beginning next year, a zero VAT rate will apply to the sale of fruits, vegetables, meat, dairy products, eggs, and other agricultural goods, with the exception of cotton and grain.
At the same time, the current practice of refunding VAT paid on seeds, fertilizers, fuel, transport, electricity, and other production costs will remain in place. As a result, farmers are expected to save around 300 billion soums annually and reclaim an additional 400 billion through the new exemption.
According to the President, these measures will encourage greater transparency in the sector, foster the growth of large-scale plantations, and expand food processing enterprises. Authorities were instructed to ensure effective implementation of the new rules and provide detailed guidance to producers.
Nevertheless, the shadow economy still holds a significant share in the sector. Currently, a 12 percent VAT rate applies to food sales.
During an open dialogue with entrepreneurs, President Shavkat Mirziyoyev instructed responsible bodies to reduce the tax burden on farmers and dehqans. With the participation of the International Monetary Fund and local as well as foreign experts, proposals were developed to legalize agricultural operations.
Under the new framework, beginning next year, a zero VAT rate will apply to the sale of fruits, vegetables, meat, dairy products, eggs, and other agricultural goods, with the exception of cotton and grain.
At the same time, the current practice of refunding VAT paid on seeds, fertilizers, fuel, transport, electricity, and other production costs will remain in place. As a result, farmers are expected to save around 300 billion soums annually and reclaim an additional 400 billion through the new exemption.
According to the President, these measures will encourage greater transparency in the sector, foster the growth of large-scale plantations, and expand food processing enterprises. Authorities were instructed to ensure effective implementation of the new rules and provide detailed guidance to producers.
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