Uzbekistan Introduces Zero VAT Rate for Farmers from 1 January 2026

Tashkent, Uzbekistan (UzDaily.com) — President Shavkat Mirziyoyev reviewed a presentation on measures to develop the agricultural value chain in Uzbekistan.

In recent years, the agricultural sector has undergone large-scale structural reforms to increase efficiency. Notably, cotton and grain cultivation areas have been reduced, while farmers’ focus has shifted toward food crops. Additionally, 160,000 hectares of new orchards and vineyards have been planted, and 1,500 food production projects with a total investment of around US$1 billion have been implemented.

Despite these efforts, a significant portion of the agricultural sector remains in the informal economy, with not all production officially reported. Currently, a 12% VAT rate is applied to the sale of food products. During an open dialogue with entrepreneurs, the president instructed authorities to create more favorable conditions for farmers and reduce their tax burden.

With support from the International Monetary Fund, as well as domestic and foreign experts, proposals were developed to bring the sector out of the “shadow” economy. According to the initiatives, starting January 1, 2026, farmers and dehkan households will benefit from a zero VAT rate on the sale of their own agricultural products. This exemption applies to fruits, vegetables, meat, milk, eggs, and other food products, excluding cotton and grain.

Farmers will still be able to reclaim VAT paid on seeds, fertilizers, fuel, transportation, electricity, and other production expenses. As a result, farmers and dehkan households are expected to gain an additional 300 billion soums annually, with another 400 billion soums refundable through the new tax benefit.

These measures aim to encourage transparency in the sector, expand industrial plantations, and promote the development of food processing enterprises. Relevant agencies have been tasked with explaining the new regulations to farmers, ensuring effective implementation, and actively supporting food production.