In recent years, structural reforms have been implemented in the agricultural sector, accompanied by measures aimed at increasing its efficiency. Sown areas for cotton and grain have been reduced and redirected toward the cultivation of food crops. A total of 160 thousand hectares of new orchards and vineyards have been planted. Additionally, 1,500 projects in the food production sector have been implemented, with a total value of $1 billion.

At the same time, the share of the shadow economy in agriculture remains significant. Not all production is reflected in official reporting. Currently, the value-added tax rate on the sale of food products is set at 12 percent.

This issue was raised during the open dialogue of the President of the Republic of Uzbekistan with entrepreneurs. The Head of State instructed the responsible agencies to create more favorable conditions for farmers and to reduce their tax burden.

In this regard, with the participation of the International Monetary Fund, as well as foreign and local experts, proposals have been prepared to bring the agricultural sector out of the “shadow.”

According to these proposals, starting from January 1 of next year, the value-added tax will be applied at a zero rate to farmers when they sell their own products. This benefit will cover fruits, vegetables, meat, milk, eggs, and other agricultural products, excluding cotton and grain.

At the same time, the practice of refunding VAT paid on seeds, fertilizers, fuel, transport, electricity, and other production expenses will remain in place. As a result, farmers will retain an additional 300 billion UZS annually, while another 400 billion UZS can be recovered through the new benefit.

Overall, these measures will encourage greater transparency in the sector and lay the foundation for increasing the number of large-scale industrial-type plantations and enterprises that process agricultural products.

Responsible officials have been instructed to explain the new procedure to farmers, ensure its effective implementation, and promote food production more actively.