Ministry of Justice: "The catering sector needs reforms"

The Ministry of Justice of Uzbekistan has studied the regulation of the catering industry and has identified a number of problems that need to be addressed as soon as possible. The department proposes to update legislation that does not meet modern requirements.

The survey conducted among 2.1 thousand public catering enterprises revealed the following problems:

First, outdated legislation.

A restaurant must post a notice a week before closing for cleaning, repairs, and other work or face a fine of 2 million soums,” the report says.

Sanitary rules and norms in catering services do not meet modern requirements.

In particular, dishes cannot be cooked on stoves with coal, wood, or solid fuel (this requirement cannot be met if the gas supply is limited in winter). Another example is that there should be separate knives for 12 types of food.

Secondly, the tax burden and complex tax administration.

“Public catering organizations pay 7-9 types of taxes. In particular, turnover tax (turnover up to 1 billion soums), value-added tax, income tax, social tax, personal income tax. persons (as a tax agent), property tax, land tax, tax for the use of water resources, a fee levied for the right to sell alcoholic products (when selling alcoholic products). payment of taxes,” the Ministry of Justice writes.

Thus, almost 1/3 of the respondents experience difficulties in understanding tax legislation in the course of their activities.

In turn, these factors lead to a high (30-40%) share of the shadow economy in the industry.

Thirdly, numerous inspections.

It turned out that public catering enterprises are constantly disturbed by more than 10 state bodies (tax, fire, sanitary, labor, law enforcement agencies, housing and communal services, etc.).

“In 2020-2021, about 8,000 inspections were carried out by three departments (tax, fire, sanitary). That is, an average of 14.5% of public catering establishments are checked annually. However, representatives of enterprises participating in the survey expressed a different opinion, that is, 2.1 thousand respondents noted that 3 inspections were carried out monthly, which shows that the actual number of inspections is 5.5 thousand per month, as well as the presence of cases illegal inspection”, - Ministry of Justice.

Fourth, cases of corruption during inspections.

The rules governing this area are complex, and therefore there may be violations in the activities of catering establishments. These violations entail checks, which can later lead to corruption. For example, 26.4% of respondents (905) stated that they had encountered cases of corruption in tax, 20.3% (697) in sanitary and 11.3% (387) in fire control authorities, and also noted that the most common a type of corruption is the free service of employees of state bodies.

Fifth, problems with connection to engineering and communication networks and interruptions in the supply of gas, electricity and water.

63.4% of the interviewed representatives of public catering enterprises emphasized that at the beginning of their activities they faced problems related to connecting to infrastructure facilities.