Uzbekistan’s financial overview

1. Uzbekistan’s financial overview Deputy ministerof finance Republic ofUzbekistan S. Bekenov

2. GDP growthover period of 2001-2006(in %)

3. National measure growth for 2006

4. Tax burden change dynamics over period of 1991-2006

5. Since the July 1, 2005 Single tax payment - 13% Taxation revision for small business and micro firms Till the July 1, 2005 Single tax payment rate brought downfrom 13% in 2005 to 10% in 2007 Single tax– 12 % Assessments to off-budgetpension fund– 0,7% Assessments to republican road fund– 1,5% Assessments to school fund– 1% Sum of taxes and assessments– 15,2%

6. Small business • Small business entities got an option for simplisticall taxation: • - Single tax payment; • single land-tax – for farm producers. One year single tax deferral for newly established small businessentities Verifications reduction (not more than once in 4 years). The periodicity of tax and duties calculations submission is reduced (once in a quarter). The periodicity of financial report submission is also reduced (once in a year). Simplified book-keeping. Created conditions for small business

7. Share of small business in GDP

8. Changes in tax rates over period of2005-2007

9. Created benefits for non-manufacturing business According to theDecreeof the President of the Republic of Uzbekistan datedApril 17, 2006 «About the measures on accelerationofnon-manufacturing business and services developmentin the Republic of Uzbekistan» with the purposes of creation of favorable conditionsfor the accelerationofnon-manufacturing business and services development, and increase its share in the economy of the country, legal entities, rendering following servicesare exempted from income-tax and single-tax paymentstill December 31, 2010: • - Microcriditig and leasing services; • - Insurance services; • - Professional participants services in the insurancemarket; • - Accounting and audit services; • - Household services.

10. Tax privileges given in the security market The following types of income of legal entities and natural persons are not subjected to taxation: - the income received as the dividends,and transferredto increase the equity of legal entity, from which they were received; - the interest revenue from government-paper Revenue of legal entities and natural persons received as the share dividends from commercial banks are exempted from taxes for the period till January 1, 2010. The following activities are exempted from the value added tax: - operations on securities movement; - depository servicesandservices in organization of securities auction Investment and privatization investment funds’ revenuereceived as the share dividends from the investment to owned enterprises, and income directed to purchase the shares in owned enterpriseare exempted from tax payments, and payments to off-budget funds

11. Audit service development 1. With the purposes of creation of favorable conditionsto acceleratethe development ofaudit services, and increase its share in the economy of the country, the income received from audit servicesis exempted from income-tax and single-tax paymentstill April 1, 2009 ( Decreeof the President of the Republic of Uzbekistan dated 17.04.2006 #PP-325) • 2. Withthe purposes of creation of favorable conditions to increase thecredibility of security marketparticipants towardsthe financial information, providedby the paper Issuers, and creation the basis for corporate management development: • In case of issue the corporatebonds, theopen joint-stock companies, have to provide the financial informationconfirmed bythe auditor’s conclusion; • SinceJanuary 1, 2007, the enterpriseswith balancecostof assets morethan 1 billion UZS have to create theinternal audit services,appointive and accountable to thesupervisory board; • Attheenterprises, where thegovernmental equity share is morethan 50 %, the audit company selection for performance ofexternal auditis carriedouton a competitivebasis fromthe listdetermined by theState property committee andtheMinistry offinance of the Republic of Uzbekistan. • (Decree of thePresident of the Republic of Uzbekistan dated 27.09.2006г. #PP-475)

12. Basicdirections ofreforming anddevelopment ofthe insurance services market • 1. Withthepurposesofcreationof favorable conditions for acceleration the development of insurance services market, since April1, 2006 revenuefrom renderinginsuranceservices is exempted fromincome taxand single tax payments for three years period (Decree of the President of the Republic of Uzbekistan #PP-325 dated April 17, 2006) • 2. According to theDecree ofthePresident of the Republic ofUzbekistan #PP-640,dated May 21, 2007, thegivenprivileges are applied to allprofessionalparticipants in theinsurancemarket. • 3. Approved by the Decree ofthePresident of the Republic ofUzbekistan #PP-618dated April10, 2007, the Program on development the insuranceservices market for 2007-2010 is anticipating following activities: • further development of legislativeand normative bases ofinsurance,insuranceactivityand insurancesupervision in accordance with internationalpractice; • expansion in volumes andvariety, and improvementin qualityofrendering insuranceservices, especially in the areas of enterpriseactivity insurance, import-export operations insurance, life long-terminsurance; • integrationofthe Republican insurance market in theinternationalinsurancemarkets; • insurance manpower training, retrainingand rising the level of employee’s skill system development

13. THANK YOU!