The rates of excise taxes have changed: will cars become cheaper now in Uzbekistan

Картинки по запросу акцизный налог автомобильBefore we talk about news related to changes in excise tax rates for goods produced in Uzbekistan, we wanted to explain that such an excise tax in general and why it is needed.

Excise – this is not direct, but an indirect tax, which the producer pays. This type of tax collection really affects the price policy of producers of a certain type of product.

As an indirect tax, excises are one of the main sources of revenue for the state. And for the consumer – an additional factor that affects the increase in the cost of goods. After all, the manufacturer includes the amount of excise tax in the price of its products, thereby shifting the tax burden to the consumer.

High excises, as a rule, are placed on “harmful” goods (alcohol, tobacco products), as well as luxury goods or “luxury” goods.

The appointment of high excise taxes has other purposes. For example, the promotion of labor-intensive production, the encouragement of local producers, the improvement of the foreign trade balance through the collection of excises in addition to customs duties on imported goods.

Decree of the President of 29.12.2017 No. PP-3454 indexed excise tax rates for certain goods produced in Uzbekistan.

Excise tax rates for 2018 have changed to the following excisable goods produced in the republic:

1. Alcoholic products:

     wine natural natural fermentation (without adding ethyl alcohol) by 10% ↑;
     
other wines by 20% ↑. Natural wines are produced by the method of natural fermentation without the addition of alcohol. The level of natural alcohol content in natural wines does not exceed 13%. Fortified wines are obtained by adding ethyl alcohol to wine materials, the alcohol content in them is from 16 to 19%. Proceeding from this, the excise rates and its indexation on fortified wines outpace natural wines. Accordingly, the value of fortified wine will increase by a larger amount than the natural one;
     
cognac at 27% ↑. If in previous years the cognac was indexed in the same amounts as vodka, the last 3 years indexation of cognac is ahead of the indexation of vodka. Cognac is a more expensive drink, and excise rates for it should be higher than that of vodka and other types of alcoholic products. Accordingly, the cost of cognac will increase more than the cost of vodka or wine.
     
vodka, other alcoholic products and ethyl alcohol by 25% ↑. Vodka is the main product among alcohol products (excluding beer), which gives the largest volumes of production and more than 90% of the excise tax. Significant growth rates of excise taxation for vodka and alcohol are explained by the need, on the one hand, to limit the consumption of alcoholic beverages. On the other hand, the fiscal functions of this source of budget revenues are important;

 2. Beer by 25% ↑. Beer is a low-alcohol beverage. Proceeding from this, and increasing volumes of production, the excise rates for beer are indexed at least as much as other types of alcohol products;

 3. Tobacco products by 125% ↑. The high level of indexation of excise tax on tobacco products is associated with the requirements of the World Health Organization (WHO) and the provisions of the Law “On restricting the consumption of tobacco and alcohol products.” This indexation will lead to an increase in the cost of tobacco products;

 4. Vegetable oil (cotton), food and technical – excise rates are reduced by 2 times ↓. Considering that vegetable (cotton) oil is one of the important food products in the republic, and in order to maintain the domestic producer (in recent years, the import of vegetable oils has increased), excise tax rates are decreasing;

 5. Excise tax rates remain unchanged for petroleum products, i. at the level of 2017. This is due to the need to maintain the financial position of the oil and gas industry;

 6. The percentage rate of excise on cars produced by JSC “General Motors Uzbekistan” decreased 5.4 times ↓. This will allow to optimize the prices for the products of General Motors Uzbekistan JSC on the domestic market of the republic, and will also contribute to the further improvement of the pricing mechanism.

It should be noted that at the beginning of 2017, the tax rate of the excise tax on passenger cars of GM Uzbekistan JSC was 29%. In the summer of 2017, the excise rate was reduced by 2 percentage points to 27%.

Thus, it turns out that a significant reduction in the excise tax on cars on the one hand should lead to a reduction in their cost to the consumer, on the other – to deprive the state budget of a part of the revenues received earlier from paying the excise. It turns out, the state has made a big step towards making cars on the domestic market cheaper. The word is for the manufacturer.

 The table shows the excise tax indexation for 2018 (appendix No. 12-1 to PP-3454) for some excisable goods produced in the republic in comparison with 2017:

 

Description of goods

The tax rate in soums per unit of measurement or as a percentage of the value of goods sold excluding excise tax and VAT

Growth / decline in 2018 by 2017, in%

for 2017

for 2018

1. Ethyl alcohol (for 1 dal)

6 275

7 844

+25%

2. Wines (for 1 dal of finished products)

 

 

 

natural natural fermentation (without the addition of ethyl alcohol)

6 358

6 994

+10%

other wines

10 000

12 000

+20%

3. Cognac (for 1 dal of finished products)

58265

73 997*

+27%

4. Vodka and other alcoholic products (for 1 dal of finished products)

54 057

67 571**

+25%

5. Beer (for 1 dal of finished products)

6 416

7 699

+20%

6. Vegetable oil (cotton) (per 1 ton):

 

 

 

food

919 448

459 724

–50%

technical (unsuitable for inclusion in food products)

505 773

252 887

–50%

7. Cigarettes with a filter, without a filter, cigarettes (for 1 thousand pieces)

37 432

84 222

+125%

8. Cars produced by General Motors Uzbekistan JSC 2

29%,

from 1 June 2017 – 27%

5%

–81%

9. Rates for oil products, natural gas, liquefied gas, jewelry, silverware did not change

 

 

 

 

Notes:

 1. Excise tax rates fixed in fixed amounts can be reviewed by the MOF and STC throughout the year, based on the dynamics of prices and sales of products.

 2. Payers and the procedure for paying excise tax on cars of General Motors Uzbekistan JSC, natural and liquefied gas, precious metals are established by the MoF in agreement with the State Tax Commission.

 3. The amount of the excise tax on oil products remains at the disposal of the oil refineries of Uznefteprodukt JSC with a targeted allocation of funds for financing the import of hydrocarbon raw materials and the servicing of loans attracted for this purpose, as well as to cover the negative exchange rate difference resulting from a change in the exchange rate of the national currency .

* For cognac with a volume fraction of alcohol above 40%, the excise tax rate is set at 121,928 soums per 1 dal of finished products.

** The excise tax rate for vodka and other alcohol products with a volume fraction of alcohol above 40% is set at 111 339 soums per 1 dal of finished products.

 

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