On 17 October 2007, a meeting of the Expert Council on Fiscal Policy Improvement of the Uzbekistan Business Forum took place in the conference hall of the Grand Orzu Hotel. During the meeting the various issues related to introduction of risk analysis system into the tax control practices in Uzbekistan were discussed.
The event was organized by UNDP, State Tax Committee and the Chamber of Commerce and Industry of Uzbekistan within the framework of the joint projects: "Improvement of Tax Administration in Uzbekistan" and "Business Forum of Uzbekistan".
Tax control is performed by tax authorities in order to ensure abidance of tax legislation by enterprises and organizations and to facilitate accurate and timely collection of taxes and payments. Based on the international experience, availability of established taxpayer inspection procedures is an important prerequisite for ensuring efficient tax control system. Whereas inspections are applied only to those enterprises, that violate legislation. Establishment of the efficient tax control system in Uzbekistan is important for further development of private sector, because decrease in the number of inspections will result in reduction of costs for the entrepreneurs, more stable environment and stimulation of their growth.
In accordance with new principles of tax control, potential violators of tax legislation, making errors and allowing inaccuracies in their financial statements will be automatically included into the "risk zone". Thus, only those enterprises and organizations that are violating tax legislation will be subject to tax inspections.
This will result in reduction of costs not only for business entities, but also for the government. Moreover, this will increase the efficiency of tax inspections thanks to smaller number of tax inspections provided by the limited human and material resources. Such approach defines the essence of the risk analysis system which requires elaboration of the criteria and measuring the risk level for each taxpayer.
The risk analysis system, which is effectively used in developed countries, is becoming increasingly popular and is being introduced into the tax controlling in transition economies. But each country applies its own approach of elaboration and introduction of the system.
During the meeting experts of the State Tax Committee made a presentation about the opportunities of introduction of risk analysis system into the work of national tax authorities. In particular, they described current problems, difficulties arising during the inspection of commercial entities, and possible methodologies for overcoming such difficulties, highlighting the importance of improving of tax supervision system, which must be modernized applying modern technologies.
As it was noted during the meeting, risk analysis system will be introduced into the work of tax control bodies in Uzbekistan. However, its establishment will require adequate information and technical bases, human resources, improvement of financial and tax reporting.
Among participants of the round table there were representatives of the State Tax Committee, independent experts and representatives of the private sector, including international experts of the State Revenue Service of the Republic of Latvia who shared their theoretical and practical experience in the sphere of tax administration.
As meeting participants noted, studies in this direction, and consequent transition to the risk-analysis system, will allow to solve problems of many participants of market relations, the private sector in particular, and will raise the efficiency of the work of tax authorities.