Request for Review of Excise Policy
In an open letter addressed to the country's leadership, the association emphasizes the need for a detailed analysis of the economic and social consequences of the proposed changes regarding the excise tax on sweet drinks, which is planned to be increased from 3 soms to 5-11 soms per liter. The introduction of additional excise taxes on energy drinks and salty snacks is also being considered, and the revenue from the tax is expected to be directed to the National Health Fund.Conflict with State Strategy
Agro-business representatives assert that they support measures aimed at improving public health; however, they believe that changes should be carefully analyzed in terms of their impact on the agro-industrial sector. In particular, the presidential program aims to increase the volume of agricultural product processing by 50% by 2030.A significant portion of processed fruits and berries is used for the production of compotes, nectars, and other beverages.
Consequences for Farmers and Regions
The association emphasizes that an increase in excise taxes could lead to a rise in production costs, a decrease in the competitiveness of local producers, and a reduction in the purchase of agricultural raw materials from farmers.This, in turn, could negatively affect the workload of processing enterprises and the number of jobs in the regions.
Concerns About Imports and the Shadow Market
The business community warns of the possibility of local products being displaced by cheaper imported beverages. In an open market environment, an increase in the tax burden could lead to a shift in demand towards foreign goods.Additionally, producers note that the country lacks the necessary laboratory infrastructure to monitor sugar content in products, which creates additional difficulties for administering differentiated excise rates.
Proposal to Maintain Current Conditions
Representatives of the agro-industrial complex insist on the need to maintain the current level of tax regulation and continue the dialogue on this issue involving businesses, relevant ministries, and experts.“State policy must be consistent. We support initiatives to improve public health; however, such decisions must be made considering their real economic consequences. Changes in the tax burden should be assessed in terms of their impact on farmers and the processing of agricultural raw materials,” noted industry representative Rustam Baltabaev.
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