For Uzbekistan, producing shawarma and lavash turned out to be more profitable than manufacturing cars

An interesting fact about Uzbekistan’s economy has caught the public’s attention: producing shawarma and lavash brings more tax revenue to the state than the BYD car factory in Jizzakh region. This was reported by analyst Timurmalik Elmuradov, who shared data on tax payments from large companies in the country.

The comparison is indeed striking. According to Elmuradov, the BYD Uzbekistan Factory paid 23.9 billion soums in taxes during the first five months of 2024. In contrast, the fast food chain Evos paid 26.5 billion soums in taxes over the same period. Meanwhile, the car factory had an impressive turnover of 1.7 trillion soums, while Evos’ turnover was much lower at just 330 billion soums. However, the tax burden on the car factory was just over 1%, while for Evos, it was 8%.

These figures have sparked active discussions, especially regarding tax incentives and preferences for different sectors of the economy. Elmuradov pointed out that the International Monetary Fund (IMF) recently recommended that Uzbekistan review its tax incentives for attracting investment to reduce their negative impact on the budget.

“It would be a good idea,” the analyst emphasized, pointing out the need for changes in tax policy.

Journalist and blogger Nikita Makarenko also commented on the situation. In his view, the figures show that Evos is a much more efficient taxpayer than the car factory.

“It turns out that for the republic, it’s more profitable to produce shawarma and lavash than electric cars,” Makarenko ironically noted.

According to him, it is unlikely that Evos receives significant tax or customs benefits, unlike the auto industry. At the same time, the fast food chain does not call for imposing tariffs on imported kebabs.

“Critics of Uzbekistan’s accession to the WTO say it will be very painful for us if we strip our auto industry of benefits and preferences. But judging by these numbers, even McDonald’s could compensate for this loss if it enters our market,” Makarenko concluded.

Tax incentives and preferences: pros and cons

This case raises important questions about tax breaks for large enterprises and their effectiveness. The auto industry, like other key sectors, often enjoys significant tax incentives, which reduces its contribution to the state budget. This results in small and medium-sized businesses, such as Evos, bearing a significant portion of the tax burden.

The discussion also touches on the future of Uzbekistan’s entry into the World Trade Organization (WTO) and the possible consequences for the auto industry. Creating equal conditions for all sectors of the economy could help the country diversify its sources of tax revenue and reduce its reliance on preferential conditions for large manufacturers.

Thus, the question remains: should the country continue to support the auto industry through significant tax incentives, or would it be more beneficial to focus on supporting small and medium-sized businesses, which, as the experience of Evos shows, can be a more efficient source of tax revenue?