Most taxes are payable to the state budget, and are well aware of, at least, many of them, such as property, land, income taxes and VAT. However, most of our citizens are unaware that there are three types of land tax. They are the land tax, the single land tax, and the tax on the use of subsoil, as we all know.
We have heard that Uzbekistan is one of the world leaders in the production of gold and uranium, but we can’t think of what their miners will pay for their mineral resources.
Tax on subsoil use
Legal entities and natural persons, who are mining the mineral resources, such as gold, uranium, copper, nonmetallic building materials and performing their processing with separation of useful components, pay the subsoil use tax.
Currently, there are 59 legal entities in the Fergana region, which use the subsoil blocks containing cement raw materials, gypsum and anhydrite, sand-gravel mix and non-ore minerals. They are currently paying taxes for subsoil use. In fact, in the first quarter of 2019, they received 6,077 billion sums from this tax on the state budget.
When it comes to land tax, we know that we have to pay this tax at a fixed rate for the size of the area where we live, our property. The tax on the use of depths is set by a certain percentage, depending on the volume of the finished product (extracted) finished product and its average realization value. More precisely, for each type of extracted minerals there is a separate rate, taking into account such factors as their rarity and their market value.
Tax on the use of mineral resources in accordance with Annex 10 to the Decree of the President of the Republic of Uzbekistan dated December 26, 2018 “On the forecast of main macroeconomic indicators and parameters of the State budget and budget targets for 2020-2021” rates are set.
For example, for the production of cement raw materials at the rate of 10%, but not less than 45,000 sums per tonne, for the production of original metals such as gold and silver, a 25% tax rate is applied to the average value of mineral resources.
Let’s look at some examples of how this tax is calculated:
Kuvasaycement, which operates in Logan village of Kuvasai city, produced more than 211,000 tonnes of limestone and clay (cement raw materials) in the first quarter of 2019, at a rate of 10% of the actual cost of the finished product, but not less than 45,000 soums. 5 billion sums were considered tax on subsoil use.
Private enterprise Arabella-Class in Uzbekistan district is engaged in gypsum mining. The enterprise extracted 4,378 tonnes of gypsum in January-March and paid an average of 8.1 million sums at a rate of 5 per cent of the average cost per ton (37,259 soums).
In the first quarter of 2019, LLC “Mining Area 3”, located in Kapchugay village of Altyaryk district, produced 5800 cubic feet of sand-gravel mixture at an average rate of 1.8 million sums per cubic meter (6312 soums). paid a tax on subsoil use.
Of course, the users of the subsoil do not only pay this tax, but also pay the general taxes for the use of land, property, water resources, profit, VAT.
It is noted that the amount of subsoil use tax for certain types of minerals shall be determined based on the tax base and the established rate, but not less than the tax amount for subsoil use. For example, for the production of gypsum and anhydride 5% of the average cost of this product, but not less than 4,000 soums per ton, is calculated at 5% of the average value for the production of limestone and dalomites, but not less than 5,000 soums per ton.
SSC Press Service