Eco-Tax Removed from Uzbek Vehicle Recycling Draft Bill

Tashkent, Uzbekistan (UzDaily.uz) — The Agency for Waste Management and Circular Economy Development of Uzbekistan has announced a substantial revision to the draft bill concerning the recycling system for old vehicles.

A provision that required a mandatory annual environmental compensation fee for owners of vehicles aged 30 years and older has been removed from the document.

According to the agency, the decision followed broad public discussions and took into account received proposals and feedback. The most heavily debated provision was the mandatory annual environmental compensation fee of 30 basic calculation units, equivalent to 12.36 million soums, which has been omitted from the updated version of the draft bill.

Instead of a mandatory payment mechanism, a voluntary recycling system based on market principles is being proposed. Under the new concept, enterprises responsible for the independent assessment and recycling of old vehicles will be selected nationwide through open tenders.

Vehicles, including non-functional ones, will be appraised at market value. Inspections for vehicles unable to move under their own power are planned to take place at their current location.

Following the appraisal, the owner can choose between two compensation options: receiving cash or obtaining a special voucher. The voucher can be used as a down payment when purchasing a new car from an official dealer. It is proposed that the remaining cost of the vehicle be paid in interest-free installments over a period of two to seven years.

If an owner decides not to use the voucher, it can be exchanged for a cash payment within one month. A portion of the expenses incurred by the operators conducting the vehicle appraisals and recycling is planned to be covered by funds collected from the vehicle recycling fee.

The agency provided an example of how the proposed mechanism would function. According to its data, if an old vehicle such as a GAZ-24, a Moskvich, or a first-generation Nexia is appraised at a minimum of 5 million soums, the owner will be able to purchase a new Cobalt with no down payment, making monthly interest-free payments of approximately 1.9 million soums over seven years. If the appraised value of the vehicle reaches 70 million soums, the monthly payment will drop to 1.13 million soums.

The agency attributed the necessity of the reform to environmental factors.

According to agency data, out of five million vehicles registered in Uzbekistan, approximately 100,000 are in a non-functional state and generate 63% of harmful urban emissions. In addition, recycling a single vehicle produces up to 50 kilograms of hazardous solid waste.

The agency emphasized that work on the draft bill is ongoing and urged citizens to submit their proposals and comments for the further refinement of the document.