Abolishing Mass Tax Cashback Proposed in Uzbekistan

Tashkent, Uzbekistan (UzDaily.uz) — A proposal has been made in Uzbekistan to abandon the mass payout of tax cashback for fiscal receipts and transition toward targeted incentive measures. This initiative was put forward by the Institute for Reducing the Shadow Economy, Improving Tax and Customs Administration, and Fiscal Analysis under the Ministry of Economy and Finance.

The rationale for the review is the steady growth of budget expenditures: while 820 billion soums were directed toward payouts in 2022, this amount is projected to reach 1.8 trillion soums in 2026, calculated based on data from January–May. For comparison, 900 billion soums are planned for the construction of kindergartens in 2026.

The mechanism for returning 1% of the purchase value was launched during the implementation phase of online cash registers and identification codes. Its task was to accustom buyers to demanding cash register receipts, thereby involving the population in public tax control. The institute acknowledges that the cashback successfully fulfilled this role: it helped form the habit of obtaining receipts, increased transparency in retail trade, and reduced shadow turnover. However, the tool was initially viewed as temporary, and once the new behavioral model became established, the need for mass monetary incentives decreased.

A comparison of expenses with results indicates that the returns from the mechanism are declining. Turnover tax revenues continue to grow—from 1.65 trillion soums in 2021 to 3.07 trillion soums in 2025—but the growth rate is slowing down compared to the initial stage of digitalization. Further scaling up of payouts is no longer accompanied by a comparable increase in tax revenues.

A significant portion of the incentives goes to shoppers at large retail chains that already operate within the legal sector. In May 2026, buyers were paid 146.6 billion soums in cashback, of which 15.7 billion soums, or 10.7% of the total volume, went to the ten largest retail brands.

The leader was the Korzinka supermarket chain, with 6.87 million receipts and 9.4 billion soums in accrued cashback. In effect, the budget is subsidizing transactions that would have occurred even without the reward. Furthermore, the mass return system has spawned abuses, with schemes detected involving the generation of fake receipts without actual product sales solely to obtain payouts from the budget.

In its place, the institute proposes conducting state lotteries among buyers who register receipts in sectors with high tax risks—such as public catering and small retail stores. The principle of "every receipt is rewarded" will change to an approach where "control in the most high-risk segments of the economy is rewarded."

According to the institute's estimates, up to 100 billion soums per year could be directed toward lotteries with large prizes—such as cars, travel packages, and other winnings valued at over 5 million soums—which would cut budget expenditures by approximately 20 times.

It is specifically emphasized that the VAT refund upon purchasing socially significant goods by individuals listed in the social register retains its importance. This measure is targeted and social in nature, aimed at supporting vulnerable categories of the population rather than modifying general consumer behavior.

The proposed transition draws on international practice. OECD and IMF approaches are built around the digitalization of administration, risk-oriented control, automatic data exchange, and big data analytics, whereas cash rewards to buyers for receipts are practically never applied as a long-term tool.

Modern information systems used by the tax authorities of Uzbekistan already automatically reconcile data from online cash registers, electronic invoices, digital marking, and customs, while the growth of e-commerce creates a continuous digital trail of operations. Under these conditions, control is exercised without the constant involvement of buyers, and the function of mass cashback loses its original significance.