The key facts

  • Mukhammadiyev: a tax similar to an excise will fall on prices and the population; it would be reasonable to apply it only to producers of fuel and energy products
  • Bakirov: the purpose of the tax is to encourage the chemical industry, thermal power plants and oil refining toward technological change, not budget revenue
  • Experts note the absence of a fair system for assessing the impact of enterprises on the environment

What this is about

Uzbekistan is discussing the introduction of a carbon tax, and experts are warning about the risks of its implementation. Tax consultant Murod Mukhammadiyev, in a conversation with Kun.uz, stated that if the tax is introduced as an additional one, it will directly affect prices: like an excise tax, it is added on top of the price, and its amount is calculated based on how much carbon an enterprise emits into the environment with its machinery. As a result, he said, the tax will fall on the shoulders of the population as the end consumer.

Who will be affected by the tax

Mukhammadiyev suggested that it may be reasonable to apply the tax only to producers of fuel and energy products — in that case it would become part of the price and its impact on the end consumer would be limited. If, however, the tax were extended to enterprises that use fuel as a raw material, it would directly affect the price of every product. The consultant himself said he would treat the initiative with caution.

The purpose of the tax and the measurement problem

Economist Otabek Bakirov emphasized that the main purpose of the carbon tax is not additional budget revenue, but encouraging enterprises that pollute the environment to comply with environmental requirements: the chemical industry, thermal power plants, and oil and gas refiners. At the same time, in his view, before introducing the tax it is necessary to answer the question of how to measure and assess the impact of enterprises on nature. He wondered whether a fair system of administration or assessment exists: what measurements are used for the coal-fired thermal power plants of Angren, and how environmental pollution is measured for the oil and gas processing companies in Mubarek, Shurtan and Guzar. Bakirov clarified that he is not against the carbon tax itself, but its foundations and consequences should be studied in advance.