Uzbekistan Proposes Excise Tax on Palm Oil Imports

Tashkent, Uzbekistan (UzDaily.uz) — A proposal has been introduced in Uzbekistan to levy an excise tax on imported palm oil. The initiative was put forward by the Institute for Reducing the Share of the Shadow Economy, Improving Tax and Customs Administration and Fiscal Analysis under the Ministry of Economy and Finance. The proposal was presented on 30 July during a fiscal dialogue.

The institute proposes setting a specific excise tax rate of $139 per ton, which amounts to approximately 1.7 million soums. According to the calculations of the initiative's authors, this corresponds to about 10% of the average import cost of palm oil in 2026, which is estimated at $1,388, or 16.93 million soums per ton.

According to the presented calculations, with an annual import volume of 12.8 thousand tons, the introduction of the new excise tax could provide the state budget with approximately 21.7 billion soums in additional revenue.

As justification for the initiative, the developers state that the market price of palm oil, in their view, does not reflect the social costs associated with its consumption, including healthcare expenditures. The presentation notes that such taxes are viewed in economic theory as a tool to account for negative externalities.

The authors of the initiative also believe that consumers are not always fully aware of the potential risks associated with the consumption of products high in saturated fats. Since palm oil is frequently used as an ingredient in processed food products, the institute considers labeling alone insufficient, while price mechanisms can serve as an additional tool to regulate consumption.

The presentation cites recommendations from the World Health Organization outlined in the 2016 report Fiscal policies for diet and the prevention of noncommunicable diseases, according to which taxation of products high in saturated fats can be considered a measure for the prevention of noncommunicable diseases.

In addition, the authors of the initiative refer to the position of the World Bank, according to which such excise duties are capable of simultaneously influencing consumption structures and providing additional budget revenues.

The institute also notes that current tax incentives and zero rates, according to their assessment, create a price advantage for certain types of fats compared to alternative products. The introduction of an excise tax, the developers believe, would help partially eliminate this imbalance.

The proposal was presented for discussion as part of the fiscal dialogue. The event materials did not report any decision regarding its implementation.