 Cotton Taxation in Uzbekistan. Opportunities for Reform
The Cotton Taxation in Uzbekistan study estimates in detail the major taxes and subsidies in the cotton sector over the period 2000-2004. The study estimates major explicit (or visible) and implicit (or hidden) taxes and subsidies. Data are presented in an Excel database which allows the user to simulate the impact of different policy reform scenarios and makes explicit the assumptions used to calculate taxes and subsidies. This study estimates net transfers (taxes minus subsidies) at around 20-22 percent of farmers’ gross cotton revenue in 2003-2004. Net of debt forgiveness, net transfers were at around 30 percent of farmers’ gross cotton revenues in 2003 and 2004. This is higher than the corporate income tax rate of only 18 percent, or the maximum personal income tax band of 30 percent. The study concludes that cotton is over-taxed relative to other crops, therefore creating disincentives for farmers to produce cotton relative to other crops. However the problem is more than just the level of taxation. The study argues that the current tax structure has perverse incentives which cause inefficiencies and cotton production could be increased at no cost to the budget if input subsidies and output taxes were reduced by equivalent amounts. The study presents a reform proposal which is fiscally neutral and would create a net welfare gain to Uzbekistan. Available Documents:
Cotton Taxation in Uzbekistan. Opportunities for Reform - English version (228KB, PDF)
Cotton Taxation in Uzbekistan. Opportunities for Reform - Russian version (670KB, PDF)
 Cotton in the Global Context: Discussion Paper for the Governments of Central Asia
This report is designed to provide a backdrop for cotton producers, the private sector and policy makers in transition economies to enable them to assess their current position relative to the global cotton market. The authors seek to highlight the successful facets that constitute cotton production in countries that are considered to be "success stories". Adoption or rejection of these models will obviously depend on the specifics of the economies of the various readerships, but it is clear that there are valuable parallels and lessons to be drawn from international experience and practice. Equally importantly, the authors have sought to show the trends in production and consumption throughout the world. With the increasing globalization of trade and improved access to markets, it is clear that events in the global economy and production changes in other growing countries have a direct impact even at the farm gate of a producer in Central Asia. While long term price forecasting is problematic due to the actions of technical speculators, cotton remains a crop directly affected by the market fundamentals of supply and demand. With a lack of directly accessible hedging markets, there is only one direction for cotton producers in Central Asia to go and that is to develop their competitive advantage through input supply efficiency, nurturing competition, maximizing yields, improving baled cotton quality and diversifying production. Available documents:
Cotton in the Global Context - English version (360KB, PDF)
Cotton in the Clobal Context - Russian version (480KB, PDF) |
