Identifier
Created
Classification
Origin
07TASHKENT255
2007-02-15 11:28:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Tashkent
Cable title:
KARIMOV PRESSES UZBEKS TO BUY LOCAL
how-toVZCZCXRO8776 PP RUEHDBU DE RUEHNT #0255 0461128 ZNR UUUUU ZZH P 151128Z FEB 07 FM AMEMBASSY TASHKENT TO RUEHC/SECSTATE WASHDC PRIORITY 7049 INFO RUEHTA/AMEMBASSY ASTANA 8622 RUEHAH/AMEMBASSY ASHGABAT 2550 RUEHEK/AMEMBASSY BISHKEK 3135 RUEHDBU/AMEMBASSY DUSHANBE 3014 RUCPDOC/DEPT OF COMMERCE WASHDC
UNCLAS TASHKENT 000255
SIPDIS
SIPDIS
SENSITIVE
DEPT FOR SCA/CEN
E.O. 12958: N/A
TAGS: ETRD BEXP ECON PINR UZ
SUBJECT: KARIMOV PRESSES UZBEKS TO BUY LOCAL
SENSITIVE BUT UNCLASSIFIED -- PLEASE PROTECT ACCORDINGLY.
UNCLAS TASHKENT 000255
SIPDIS
SIPDIS
SENSITIVE
DEPT FOR SCA/CEN
E.O. 12958: N/A
TAGS: ETRD BEXP ECON PINR UZ
SUBJECT: KARIMOV PRESSES UZBEKS TO BUY LOCAL
SENSITIVE BUT UNCLASSIFIED -- PLEASE PROTECT ACCORDINGLY.
1. (U) On December 18, President Karimov issued a decree increasing
excise taxes on imported goods. It appears Karimov's rationale
behind the taxes, ranging from five to 200 percent, is to protect
the domestic market by encouraging import substitution, and conserve
hard currency reserves by dissuading currency conversion.
2. (U) In 2006, excise taxes accounted for approximately 12.6
percent of the total Uzbek budget revenue. Post estimates the
average increase in excise taxes for 2007 is 15 percent.
2007 Excise Taxes on Selected Imports:
Good: Excise Tax (percent):
Meat and poultry sub-products 70
Apples, pear, quince 100
Cotton seed oil 50
Chewing gum 70
Ice cream, ice products 200
Sugar 30
Vodka 85
Pet food 70
Cotton fiber, yarn and thread 10
(Note: While Uzbekistan is a major producer of cotton, it still
imports cotton products for its textile industry; hence, the low
excise tax. End note.)
3. (SBU) Comment: The government is prohibitively taxing imported
consumer goods in order to add considerably to state revenue and
protect domestic industries. Meanwhile, consumers pay higher prices
for a reduced selection of products. The government has limited
hard currency reserves and seeks out all opportunities to restrict
currency conversion. If the demand for imported goods falls, the
demand to convert soum into dollars will lessen. This policy
prejudices import/export businesses that rely on converting soum
into dollars; the majority of small foreign companies in Uzbekistan
are import/export businesses.
Purnell
SIPDIS
SIPDIS
SENSITIVE
DEPT FOR SCA/CEN
E.O. 12958: N/A
TAGS: ETRD BEXP ECON PINR UZ
SUBJECT: KARIMOV PRESSES UZBEKS TO BUY LOCAL
SENSITIVE BUT UNCLASSIFIED -- PLEASE PROTECT ACCORDINGLY.
1. (U) On December 18, President Karimov issued a decree increasing
excise taxes on imported goods. It appears Karimov's rationale
behind the taxes, ranging from five to 200 percent, is to protect
the domestic market by encouraging import substitution, and conserve
hard currency reserves by dissuading currency conversion.
2. (U) In 2006, excise taxes accounted for approximately 12.6
percent of the total Uzbek budget revenue. Post estimates the
average increase in excise taxes for 2007 is 15 percent.
2007 Excise Taxes on Selected Imports:
Good: Excise Tax (percent):
Meat and poultry sub-products 70
Apples, pear, quince 100
Cotton seed oil 50
Chewing gum 70
Ice cream, ice products 200
Sugar 30
Vodka 85
Pet food 70
Cotton fiber, yarn and thread 10
(Note: While Uzbekistan is a major producer of cotton, it still
imports cotton products for its textile industry; hence, the low
excise tax. End note.)
3. (SBU) Comment: The government is prohibitively taxing imported
consumer goods in order to add considerably to state revenue and
protect domestic industries. Meanwhile, consumers pay higher prices
for a reduced selection of products. The government has limited
hard currency reserves and seeks out all opportunities to restrict
currency conversion. If the demand for imported goods falls, the
demand to convert soum into dollars will lessen. This policy
prejudices import/export businesses that rely on converting soum
into dollars; the majority of small foreign companies in Uzbekistan
are import/export businesses.
Purnell