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Tukhsanov K.N., DSc professor
Tashkent State University of Economics
ISSUES OF IMPROVING THE COLLECTION OF TAX DEBT IN THE
REPUBLIC OF UZBEKISTAN
The annotation. This article examines the current status of taxpayer tax debt in the Republic of Uzbekistan, as well as the factors contributing to its emergence. An examination was conducted of the scientific perspectives, viewpoints, and opinions of scientists from Uzbekistan and foreign nations regarding tax debt and its occurrence. In addition, it is critical to develop proposals based on the analysis in order to improve the efficiency of tax debt collection in the Republic of Uzbekistan and eradicate any issues that may arise during the process.
Keywords: tax, tax debt, collection order, payment order, bank, tax rate, interest, bankruptcy, foreclosure.
Introduction
Since the budget income is mostly derived from taxes and fees, it is imperative that taxes and fees are collected in their whole, without any complications, in accordance with the authorized procedures. The significance of the subject is ascertained by the rise in the count of taxpayers who fail to remit the projected taxes and payments within the designated timeframes. Hence, the pressing matter confronting the tax system in our republic is the imperative reduction of taxpayers' outstanding tax obligations to the government.
Prompt payment of taxes and fees ensures the fulfillment of the state's tasks and obligations. Furthermore, it is crucial to ensure the prompt and comprehensive collection of taxes and fees as outlined in the budget. This is essential for meeting the internal and external responsibilities of both national and local governing bodies. The failure to complete tasks and meet responsibilities by the state hinders economic progress, exposes vulnerable social groups to risk, and results in a decline in the population's standard of living. Hence, it is imperative for taxpayers to ensure that they promptly settle their tax obligations, including both taxes and fees, within the designated timeframes. Complete payment of taxes and fees is essential for establishing advantageous conditions for economic entities and ensuring legal protection of their interests.
The Literature Review
Several foreign and local scholars have conducted research on the challenges related to tax and fee collection.
As per A. Smith, individuals must possess a means of payment in order to fulfill their tax obligations. Only the owner has the authority to receive earnings,
which can originate from three distinct sources. These income sources are derived from land, capital, and labor, with all other forms of revenue considered secondary. These three categories of income are the primary sources [1].
In their scholarly work, Russian scientists S.N.Alikhin and D.A.Levacheva examined the theoretical foundations of the system for recovering tax debts. According to their viewpoint, the justification for collecting tax debt and broadening the tax base lies in the difficulty of collecting it from taxpayers. They argue that a specialized approach should be taken into consideration when developing the collection mechanism, which should be based on the financial circumstances of taxpayers with tax debt. The user's text is enclosed in tags.
V. Andreeva conducted a study on the factors contributing to the lack of adherence to tax discipline among taxpayers. She examined methods for enhancing tax literacy and proposed strategies for enhancing the government's role as a partner to taxpayers.[3].
According to Sh. Toshmatov, a scientist from Uzbekistan, the imposition of hefty taxes on firms leads to several adverse outcomes. These outcomes can encompass a rise in tax liabilities, the growth of the underground economy, and a surge in debts owed to creditors. The taxation system should aim to minimize the opportunities for both legitimate and illicit tax avoidance.
As stated by A. Giyasov, taxes and mandatory payments will be promptly and fully paid. This will ensure timely funding for all initiatives implemented at the state level, including the budget and targeted funds. However, it is certain that these monies will not be sent to the appropriate budget and target funds promptly and completely, and this will hinder the state from carrying out the stated expenses within a specific timeframe [5].
Research methodology.
The paper employs logical reasoning, analysis and synthesis, a normative approach, as well as systematic and comparative analysis methodologies.
Analysis and discussion of results.
Today, tax debt arises when legal businesses and people fail to pay the cash they owe to the budget as projected taxes, leading to late payment or non-payment. The tax obligation of an individual or a tax representative can be ascertained for all categories of taxes or for each one individually. As to the Tax Code, the settlement of the tax liability, including its payment by the tax authorities, must be done in the specified order:
> amount of taxes;
> calculated penalties;
> fines.
When examining the factors contributing to the accumulation of tax debt, it becomes evident that the following can have a direct or indirect impact on its formation:
- Insufficient adherence to tax payment norms;
- Inadequate understanding of tax responsibilities;
- Officials or responsible individuals lacking adequate knowledge and expertise;
- Failure to adhere to payment schedules, resulting in outstanding debts;
- Decline in the quality of manufactured goods, services, and work performed;
- Confidential operations conducted by legal entities and individuals;
- Excessive tax burden;
- Deficiencies in tax policy;
- Geopolitical factors;
- Other circumstances such as natural disasters, pandemics, diseases, etc.
A primary factor contributing to the emergence of tax debt is the decline in
the financial condition of taxpayers.
Currently, there is the option to modify the duration of tax payment in order to assist in settling the tax liability and enhance the overall financial condition.
Delaying the tax payment period to a future date is acknowledged as an alteration in the tax payment period. Regarding the whole tax liability or a portion thereof, the interest on the outstanding debt might be modified. The alteration of the tax payment term is executed by either deferring the payment or dividing it into multiple installments.
Chapter 11 of the Tax Code of the Republic of Uzbekistan pertains to the modification of tax payment deadlines.
Article 97 of the Tax Code outlines the requirements for modifying tax payment dates, stating that postponing the tax payment date is considered a change in the tax payment date.
Article 98 of this Code outlines the specific situations in which the tax payment period cannot be altered. It states that the tax payment period cannot be modified if the interested person meets at least one of the following conditions:
1) If a criminal case has been initiated due to a crime related to the violation of tax legislation;
2) If there are sufficient grounds to believe that this person will use the change in tax payment period to conceal their money or other taxable assets, or if they plan to permanently leave the Republic of Uzbekistan;
3) If, within three years prior to the date of the application for changing the tax payment period, a decision was made by the authority specified in Article 99 of the Tax Code to terminate the previously granted deferment or installment payment due to a violation of the relevant conditions for changing the tax payment period;
4) If the person has been declared bankrupt; 5) If the person falls into the high-risk category according to paragraph 32 of the second part of Article 100 of this Code. Article 99 of the Tax Code enumerates the entities that have the authority to make determinations about modifications to the terms of tax payment.
Officials with the authority to determine alterations to tax payment
schedules 46
T/p Officials Term Type of tax
VAT
Excise tax
Profit tax
1 Cabinet of Ministers Till 3 years Personal income tax Subsoil use tax Tax for use of water resources Property tax Land tax Social tax
Tax for use of water resources
2 Local Till 2 Property tax
government years Land tax Turnover tax
VAT
Excise duty
3 Tax Till 1 year Profit tax
Committee Personal income tax Subsoil use tax Turnover tax
4 Customs Committee Till 1 year VAT Excise tax Customs duty
The Tax Committee is authorized to provide the option of paying the turnover tax in installments, without requiring the pledging of assets, collateral, or a bank guarantee.
The criteria for deferring tax payments or allowing installment payments are outlined in Article 100 of the Tax Code and Article 101 of the Procedure for providing such options. Article 102 also stipulates the cessation of tax deferment or installment payment.
If the interested party violates the terms of delay or installment payment, the authorized body that issued a decision to change the payment period for the tax can terminate the validity of the agreement prematurely. If land plots, buildings, or constructions are sold or leased while tax payments are being deferred, the full amount of the deferred tax must be paid within one month, as specified in Clause 32 of the second part of Article 100 of the Tax Code.
If the validity of a delay or installment payment is terminated before the deadline in cases outlined in the third part of Article 102, the individual involved must pay the remaining amount of the tax debt. Additionally, they must make this payment within one month of receiving the decision to terminate the validity of
46 Compiled by the author based on the Tax Code
the tax delay or installment payment. An individual is required to incur a fine for each consecutive day on the calendar, starting from the day following the acceptance date until the day the specified sum is settled. In this scenario, the remaining tax debt is settled by paying the calculated interest amount based on the decision to defer payment in installments. The tax debt mentioned in the decision to grant the option of deferred payment is determined as the difference between the principal amount and the interest.
The authorized body responsible for making decisions regarding the delay of tax payment or granting installment options will send a notification of cancellation within five days of the decision. This notification will be sent to the individual concerned, following the procedures outlined in this Code. A duplicate of said decision is dispatched to the tax authority located at the jurisdiction where the concerned individual is officially registered, within the corresponding timeframe.
An individual with a vested interest has the right to challenge the decision made by the authorized entity to postpone tax payment or terminate the validity of the installment payment prior to the specified deadline, following the legally prescribed procedure. The tax liability of corporate organizations is steadily rising each year, although the availability of certain provisions allowing for the installment-based settlement or deferment of tax obligations.
Information on tax debt of legal entities 47
# Name of the region 2019 2020 2021 2022 2023
by the country 3 045,3 2 836,4 4 428,1 7 506,7 8 543,0
Interregional tax inspectorate for large taxpayers 0,0 243,1 292,1 1 070,0 1 034,0
By regions 3 045,3 2 593,3 4 136,0 6 436,8 7 509,0
1 Karakalpakstan R. 56,9 77,7 168,6 202,9 410,0
2 Andijan region 180,6 276,4 292,0 651,5 899,8
3 Bukhara region 106,9 129,5 353,8 374,8 361,2
4 Jizzakh region 50,8 80,1 138,2 206,1 355,7
5 Kashkadarya region 1 258,9 175,4 354,5 429,2 589,5
6 Navoi region 33,5 36,4 40,2 69,7 130,2
7 Namangan region 88,1 121,7 208,8 332,4 383,8
8 Samarkand region 128,8 159,0 288,0 473,1 545,5
9 Surkhandarya region 46,6 110,5 226,8 252,5 400,8
10 Syrdarya region 115,5 203,5 318,6 395,0 388,1
11 Tashkent region 424,5 540,4 667,9 1 008,6 944,7
12 Fergana region 136,6 153,1 444,5 857,2 825,7
13 Khorezm region 32,5 40,9 77,0 118,5 213,7
14 Tashkent city 385,1 488,7 557,2 1 065,3 1 060,5
47 Author's development based on information from the Tax Committee
The tax debt of legal companies increased from 2836.4 billion soums in 2020 to 4428.1 billion soums in 2021, further rising to 7506.7 billion soums in 2022, and reaching 8543 billion soums in 2023. The tax debt in 2023 has increased by 301.2% compared to 2020, showing a 192.9% increase compared to 2021 and a 113.8% increase compared to 2022. These figures indicate that the efforts to collect tax debt are not meeting the current demand.
It is evident that tax debt is steadily rising each year since the enforcement bureaus responsible for executing court rulings to recover tax debt from legal organizations are not meeting the current required standards.
Summary and recommendations. The aforementioned analyses indicate that addressing tax arrears, reducing outstanding debts, and determining viable methods of collection are crucial priorities for maintaining the stability of budget revenues in our Republic.
Furthermore, the courts' decisions on the recovery of the debtor's property have not been implemented due to the absence of coordination among the regional units of the obligatory enforcement bureaus, as well as the high volume of other enforcement papers they are handling.
According on the information provided above, the following is recommended:
- The creation of the Tax Debt Collection Inspectorate, the sole entity in the Republic, and granting this inspectorate the authority of the Enforcement Bureau in collecting tax debts;
- Enhancing the regulations of tax legislation with the goal of raising the standard of tax compliance;
- Implementing the practice of imposing a prohibition on an individual's property for tax debts, in addition to businesses.
References:
1. Mayburd E.M., Vvedenie v istoriyu ekonomicheskoy misl. Moscow: «DELO», «VITA-PRESS». 1996. - str. 544 p.;
2. Alikhin S.N., Levacheva D.A. Evolution mechanism prinuditelnogo vzyskania zadoljennosti pered budgetom// Nalogi. - 2018 - S. 28.
3. Avdeeva Victoria Alexandrovna. Povyshenie nalogovoy gramotnosti i kultury uchastnikov nalogovykh pravootnosheniy // Interaktivnaya nauka. 2017. No. 14. URL: https://cyberleninka.ru/article/n/povyshenie-nalogovoy-gramotnosti-i-kultury-uchastnikov-nalogovyh-pravootnosheniy.
4. Sh. Toshmatov. Problems of strengthening the role of taxes in increasing the economic activity of enterprises. -Doctoral thesis. Abstract. T.: 2008.
5. Giyasov S.A. (2018) Challenges in reducing tax and debt arrears. A collection of scientific seminar materials dedicated to «Ways to increase the competitiveness of the leading sectors of the national economy through modernization and diversification»/ T.: Economy-Finance, (252 p.) 165-167 p.
