Uzbekistan May Introduce a Zero VAT Rate for Transportation Services

Uzbekistan is considering an initiative that could become a significant step in the development of the transportation sector and in reducing costs for businesses. During a meeting with President Shavkat Mirziyoyev, the founder of Ardena Transport, Denis Pavlenko, proposed introducing a zero VAT rate on transportation services, citing the successful experience of other countries.

Why Is This Important?

Denis Pavlenko emphasized that international practice demonstrates the effectiveness of applying a zero VAT rate for transportation services.

«The first outcome would be an increase in our competitiveness on the international stage. The second would be a reduction in costs for domestic producers. Logistics accounts for a significant share of the final price of goods, and eliminating VAT would allow exporters and importers to lower transportation expenses,» he explained.

This measure could serve as a stimulus for developing the country’s export and import potential and strengthening Uzbekistan’s position as a key transportation hub in the region.

The President’s Response

Shavkat Mirziyoyev noted that the transportation services market in Uzbekistan amounts to $500–600 million.

«To support local carriers, I agree with your proposal. The time has come to consider it,» the president stated.

He instructed the Ministry of Economy and Finance, along with the Ministry of Transport, to study the proposal and present concrete measures.

Next Steps

The relevant ministries are now tasked with developing a mechanism for implementing this initiative. If adopted, the proposal could mark a pivotal moment in reforming the tax system and advancing Uzbekistan’s transportation sector.

This initiative could drive significant improvements in the country’s economic landscape, making it more competitive and attractive for international trade and investment.