Dilmurod Kasimov – The Commissioner for Protection of Rights and Legitimate Interests of Entrepreneurs under the President of the Republic of Uzbekistan

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Uzbekistan, striving for sustainable economic growth and development, has taken significant steps in recent years to improve the business climate and protect the rights of entrepreneurs. An important aspect of this transformation is creating a legal and institutional framework to protect business interests, which helps attract investment and stimulate economic activity.

Therefore, states that have chosen the path of successful economic development strive to reduce the state’s role in regulating the private sector, creating conditions for the effective operation of market mechanisms, and freedom of competition.

The active involvement of the population in business activities and attracting investments into the country gives an additional impetus to the development and strengthening of the state’s economic stability.

Over the past years, Uzbekistan has been paying special attention to opening up wide opportunities for the growth and development of both small and large businesses.

In recent years, more than 3 thousand regulations have been adopted aimed at comprehensive support for business in the country.

Since 2017, Uzbekistan has made drastic, unexpected and pleasant changes for entrepreneurs. The peculiarity of these changes is that they aimed to reduce the state’s control functions and open the way to free business. All the obstacles that hindered entrepreneurs at that time were gradually removed.

Liberalization of penalties against entrepreneurs, elimination of the possibility of unjustified interference in their activities, strengthening of close diplomatic ties with foreign countries, simplification of export-import procedures – all this gave a powerful impetus to the development of the business environment and motivation for entrepreneurs to develop and actively expand their business without barriers.

In particular, all types of unscheduled inspections and counter inspections of the activities of business entities, including in criminal cases, were cancelled. A mechanism has been introduced to establish a moratorium on inspections carried out in the activities of entrepreneurs, which is actively used to this day.

Uzbekistan does not stop there. The country has set ambitious goals – to increase the share of the private sector in GDP to 80% and to increase the share of the private sector in exports to 60% by 2027.

Dialogue between the president and entrepreneurs is the key to solving many problems

For every entrepreneur, if difficulties or obstacles arise in their activities, it is important to be listened to. This is especially crucial if the problem requires the intervention of government officials.

Obviously, in the conditions of economic development of the state, problems arise that create difficulties for business. They require prompt intervention from the highest authorities to prevent stagnation in development in a particular industry, as well as to give impetus for further development.

This unique impulse was the dialogue between entrepreneurs and the President, which is held annually, giving entrepreneurs the opportunity to directly communicate with the head of state.

The opportunity to be listened to is given to every entrepreneur in every region of the country through meetings. After analysis and generalization, the most relevant and substantiated proposals are submitted to the head of state for making appropriate decisions. In addition, during the day of open dialogue the suggestions and complaints of hundreds of entrepreneurs are heard.

Over the past three years, during open dialogues, more than 33 thousand requests and proposals have been received from entrepreneurs. As a result of the dialogues, more than 150 initiatives were put forward aimed at eliminating obstacles to the development of entrepreneurship, as well as its further development.

In particular, if we analyze the initiatives put forward after the dialogue in 2021, the reforms were aimed at mitigating the effects of the pandemic, extending tax and customs benefits and providing deferrals for taxes and mandatory payments.

The 2022 dialogue was highlighted by the support of business representatives in various directions, starting with such tax reforms as reducing the VAT percentage to 12%, reducing the VAT refund period to 7 days, introducing a flat tax rate of 4% instead of the current turnover tax of 4 per cent to 25 per cent.

In addition, the mechanisms for ensuring the rights of entrepreneurs have been expanded by introducing a procedure for canceling a decision on the allocation of land plots or property only in court.

As a result of the dialogue, another problem that worried entrepreneurs was eliminated, regarding the application of increased tax rates due to the non-use of an empty building or land plot. This mechanism was cancelled, and entrepreneurs’ debts in the amount of 2 trillion soums, formed as a result of paying taxes at an increased rate, were written off.

Last year, as a result of the dialogue, the mechanisms for financing entrepreneurship were radically revised, the Business Development Bank was created, and tax reforms were introduced aimed at protecting the rights of entrepreneurs.

It has become a tradition for entrepreneurs to look forward to the date “August 20 – Entrepreneurs Day” every year. On the eve of this day, new initiatives to support business are announced during the dialogue.

Digitalization of business protection as a guarantee of ensuring unjustified interference in the activities of entrepreneurs

One of the topics that worries entrepreneurs the most is the topic of inspections. In this area, it is important to ensure the protection of entrepreneurs.

Digital monitoring of inspections carried out in the activities of entrepreneurs by government bodies is carried out by the Business Ombudsman.

The information system “Unified State Control” allows the registration of inspections carried out in the activities of entrepreneurs, their results, and the submission of complaints in case of violations by inspection bodies.

Government agencies are prohibited from conducting inspections without registering them in this system. Otherwise, this will serve as the basis for administrative liability.

To ensure transparency of inspections and protect the rights of business entities, full access is provided for business entities in the new “Unified State Control” system.

Thus, in the new “Unified State Control” system, a number of functions were added, such as the Electronic Inspection Registration Book, which provides full supervision of inspections by the Authorized Body.

To combat corruption and illegal inspections, an electronic database of all officials with the right to conduct inspections was compiled in the “Unified State Control” system. This, in turn, eliminates the possibility of falsifying the data of the certificate with the right to conduct inspections. Entrepreneurs can check these inspectors’ special IDs and, if they do not comply with the system, have the right not to allow them onto their territory.

Moreover, registers of state control functions and mandatory requirements have been compiled for business entities, which makes it possible to become familiar with the control functions of state inspections and mandatory requirements in relation to them.

As a result of the implementation of the “Unified State Control” system, it has become much easier for the Authorized Body to identify facts of violations in state control.

Strategy “Uzbekistan – 2030” – prospects for business development in the future

Uzbekistan does not stop there. Swift steps towards further support of the business sector are also enshrined in the Uzbekistan 2030 Strategy.

Effective use of the local raw material base and the development of industry based on advanced technologies, the consistent transfer of monopoly spheres to market principles, increasing the share of the private sector in the economy, and creating the most favorable conditions for the free activity of entrepreneurs still remain a pressing topic.

In addition, it is planned to completely digitalize and simplify the tax system, as well as create equal opportunities for all entrepreneurs so that the official sector becomes preferable and more profitable than illegal activities.

For this purpose, a simplified and compact legislative system will be created, convenient for the population and business entities.

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