RESOLUTION OF THE MINISTRY OF FINANCE OF THE REPUBLIC OF UZBEKISTAN, MINISTRY OF ECONOMICS OF THE REPUBLIC OF UZBEKISTAN, UZBEK AGENCY "UZKOMMUNKHIZMAT"

of January 19, 2011 No. 1, No. 2, No. 01-88

About approval of the Regulations on procedure for forming of rates and introduction of limit of profitability on utilities

List of amending documents

According to the Presidential decree of the Republic of Uzbekistan of April 17, 2001 NUP-2832 "About New Stage of Deepening of Economic Reforms in the field of Public Service" (Collection of the legislation of the Republic of Uzbekistan, 2001, N 8, the Art. 39), the resolution of the President of the Republic of Uzbekistan of February 11, 2005 N PP-5 "About measures for non-admission of unreasonable growth of rates and increase in responsibility of consumers for timely and complete calculations for utilities" (Collection of the legislation of the Republic of Uzbekistan, 2005, N 5-6, Art. 31), resolutions of the Cabinet of Ministers of the Republic of Uzbekistan of July 30, 1996 N 271 "About approval of regulations in connection with phased transition on self-sufficiency of housing and communal services", of February 5, 1999 N 54 "About approval of the Regulations on structure of costs on production and sales of products (works, services) and about procedure for forming of financial results" (Collection of the orders of the Government of the Republic of Uzbekistan, 1999, N 2, the Art. 9), of April 18, 2001 N 178 "About additional measures for enhancement of public service of the population" (Collection of the legislation of the Republic of Uzbekistan, 2001, N 8, the Art. 40) and of October 28, 2010 N 239 "About measures for further enhancement of procedure for declaring (approval) and establishment of regulated prices (rates) for goods (works, services)" (2010, N 42-43, Art. 364) the Ministry of Finance, the Ministry of Economics of the Republic of Uzbekistan and the Uzbek agency "Uzkommunkhizmat" decide collection of the legislation of the Republic of Uzbekistan:

1. Approve Regulations on procedure for forming of rates and introduction of limit of profitability on utilities, according to appendix.

2. Recognize to invalid:

the resolution of the Ministry of Finance, Ministry of Economics of the Republic of Uzbekistan and the Uzbek agency "Uzkommunkhizmat" of March 14, 2006 NN 31, 1, 02-317 "About approval of the Provision by determination of structure of costs and introduction of limit of profitability when forming rates for utilities" (рег. N 1566 of May 1, 2006) (Collection of the legislation of the Republic of Uzbekistan, 2006, N 18, the Art. 154);

the resolution of the Ministry of Finance, Ministry of Economics of the Republic of Uzbekistan and the Uzbek agency "Uzkommunkhizmat" of October 2, 2006 NN 86, 11, 1072 "About modification of the Provision by determination of structure of costs and introduction of limit of profitability when forming rates for utilities" (рег. N 1566-1 of November 3, 2006) (Collection of the legislation of the Republic of Uzbekistan, 2006, N 43-44, Art. 438).

3. This resolution becomes effective after ten days from the date of its state registration in the Ministry of Justice of the Republic of Uzbekistan.

Minister of Finance

R. Azimov

Minister of Economic Affairs

R. Gulyamov

CEO Uzbek agency Uzkommunkhizmat

U. Halmukhamedov

Appendix

to the resolution of the Ministry of Finance, Ministry of Economics of the Republic of Uzbekistan and the Uzbek agency "Uzkommunkhizmat" of January 19, 2011 No. 1, 2 and 01-88

Regulations on procedure for forming of rates and introduction of limit of profitability on utilities

This Provision according to the Presidential decree of the Republic of Uzbekistan of April 17, 2001 N UP-2832 "About New Stage of Deepening of Economic Reforms in the field of Public Service" (Collection of the legislation of the Republic of Uzbekistan, 2001, N 8, the Art. 39), the resolution of the President of the Republic of Uzbekistan of February 11, 2005 N PP-5 "About measures for non-admission of unreasonable growth of rates and increase in responsibility of consumers for timely and complete calculations for utilities" (Collection of the legislation of the Republic of Uzbekistan, 2005, N 5-6, Art. 31), resolutions of the Cabinet of Ministers of the Republic of Uzbekistan of July 30, 1996 N 271 "About approval of regulations in connection with phased transition on self-sufficiency of housing and communal services", of February 5, 1999 N 54 "About approval of the Regulations on structure of costs on production and sales of products (works, services) and about procedure for forming of financial results" (Collection of the orders of the Government of the Republic of Uzbekistan, 1999, N 2, the Art. 9), of April 18, 2001 N 178 "About additional measures for enhancement of public service of the population" (Collection of the legislation of the Republic of Uzbekistan, 2001, N 8, the Art. 40) and of October 28, 2010 N 239 "About measures for further enhancement of procedure for declaring (approval) and establishment of regulated prices (rates) for goods (works, services)" (The collection of the legislation of the Republic of Uzbekistan, 2010, N 42-43, Art. 364) regulates procedure for determination of structure of costs and introduction of limit of profitability when forming rates for utilities (water supply, the sewerage, hot water supply and central heating) rendered by the organizations - subjects of natural monopolies (further - the organizations).

I. General provisions

1. State regulation of rates for the utilities rendered by the organizations included in the State register of subjects of natural monopolies is performed according to Regulations on procedure for forming, declaring (approval) and establishment of regulated prices (rates) for goods (works, services) and the state control of their application approved by the resolution of the Cabinet of Ministers of the Republic of Uzbekistan of October 28, 2010 N 239, and this Provision.

2. For approval of rate for the rendered utilities of the organization file in body of price regulation application to which the documents specified in Item 21 of the Regulations on procedure for forming, declaring (approval) and establishment of regulated prices (rates) for goods (works, services) and the state control of their application approved by the resolution of the Cabinet of Ministers of the Republic of Uzbekistan of October 28, 2010 N 239 are enclosed.

3. In case of cost determination on production and realization of the utilities accepted in reasons for rates, the organizations are guided by Regulations on structure of costs on production and sales of products (works, services) and about procedure for forming of financial results, the approved resolution of the Cabinet of Ministers of February 5, 1999 N 54, and other regulatory legal acts.

4. The rate for the utility rendered by the organization consists of the costs included in production cost, expenses of the period, expenses on financial activities, tax expenses and to other obligatory payments from profit, and also the amount of net profit.

At the same time expenses, stipulated in Article 147 Tax codes of the Republic of Uzbekistan (Collection of the legislation of the Republic of Uzbekistan, 2007, N 52 (II)), except for expenses on assignments on content of higher bodies and associations of the organizations, are not considered in costs when forming of the approved rate for utilities.

5. The services rendered to the population on water supply, the sewerage, hot water supply and central heating including acquired by partnerships of private homeowners on behalf of the population, are assessed with the value added tax on zero rate.

6. For the purpose of stimulation of cost reduction of the organizations delivering utilities (water supply, the sewerage, hot water supply and central heating) when forming rates for these services the limit of profitability (the attitude of net profit towards production cost) in the amount of no more than 10 percent is established.

Paragraphs of the second or sixth of Item 6 are excluded according to the Resolution of the Ministry of Finance of the Republic of Uzbekistan, the Ministry of Economics of the Republic of Uzbekistan, the Uzbek Agency "Uzkommunkhizmat" registered by the Ministry of Justice of the Republic of Uzbekistan of 12.05.2014 No. 2198-1.

7. If in the previous accounting period the organization achieved economy of fuel and energy resources, raw materials and materials due to enhancement of engineering procedures and implementation of modern resource-saving technologies, in case of the next review of regulated rates to 50 percent of the saved means are considered as a part of net profit, and costs for fuel and energy resources, raw materials and materials are accepted taking into account the specified expense rates applied as a result of implementation of modern resource-saving technologies.

8. In case of approval or the subsequent review of rates for utilities of 10 percent from increase in rates become covered for the income account of the organizations delivering utilities.

9. According to Articles 313, 317 and 325 (2) the Tax code of the Republic of Uzbekistan for the organizations of heat and water supply of system of municipal services taxable basis of obligatory contributions to the off-budget Pension fund, Republican road fund and off-budget fund of reconstruction, capital repairs and equipment of comprehensive schools, professional colleges, the academic lyceums and medical institutions is products sales amount (works, services) less the value added tax and purchase value respectively for the heatsupplying organizations - heat energy and the water supplying organizations - waters.

II. Calculation of rates for the utilities rendered by the water and sewer and heatsupplying organizations

1. Services of water supply and sewerage

10. In case of calculation of utilities costs all production cycle of works including production and rendering of services directly to the consumer is considered.

At the same time cost of services of water supply joins costs on servicing and repair of water intaking constructions, pumping points, treatment facilities, engineering networks.

11. Calculations of rates are made separately on services of water supply system and in services of the sewerage.

12. In case of forecast calculation of costs of loss are provided in limits of the regulations established by the legislation.

Material costs of the water supplying organization are determined proceeding from amount of the lifted water and the approved consumption rates of reagents (chlorine, coagulants and other materials) on cleaning of 1 CBM of water.

Costs for power and lighting energy are expected according to amount of the lifted water on artesian and river water supply system, specific consumption rates of the electric power, installed capacity of the energy equipment and applicable fares 1 kWh and 1 kW of installed capacity.

13. In the sewer organizations material costs (the chlorine, chloric lime and other materials applied to disinfecting before release in reservoirs of the purified sewage) are determined proceeding from amount of the omission and sewage treatment. The size of these costs is determined by multiplication of amount of the purified waste liquid by the accepted specific consumption rates of materials and by material cost.

14. When rendering services of water supply and the sewerage by one organization, calculations on services of water supply and the sewerage are constituted separately, at the same time indirect material costs, overheads of production nature, indirect costs on work, expenses of the period and expenses on financial activities are distributed on these types of service in proportion to the salary of production personnel.

15. For calculation of the size of average economically reasonable rate it is necessary to determine the income of the water and sewer organization for amounts of the released water (allocated for waste liquid) taking into account all consumers of services which consist of production cost of services for the specific accounting period (year) taking into account perspectives of development of this industry for the next period (year) and expected influence of external factors (the change in price for energy resources, materials, rates for transportations, the tariff charges and official pay rates) and the necessary amount of profit. The size of average economically reasonable rate is determined by formula:

where:

Tsr. rate - average economically reasonable rate of 1 CBM of water (1 CBM of drain);

S - production cost of 1 CBM of water (1 CBM of drain);

Monday - the necessary profit ensuring profitable functioning of the water and sewer organizations (period expenses, expenses on financial activities, tax expenses and to other obligatory payments from profit, and also the amount of net profit) per 1 CBM of water (1 CBM of drain).

Calculation of the amount of net profit and level of profitability when forming rate is made according to Item 6 of this provision.

 Item 16 ceased to be valid according to the Resolution of the Ministry of Finance of the Republic of Uzbekistan, the Ministry of Economics of the Republic of Uzbekistan, the Uzbek Agency "Uzkommunkhizmat" registered by the Ministry of Justice of the Republic of Uzbekistan of 12.05.2014 No. 2198-1)

17. In case of approval or the subsequent review of rates for services of water supply and the sewerage of 10 percent from increase in rates become covered for the income account of the water and sewer organization. For this purpose the organization finds internal reserves of receipt of additional incomes or cost reduction by creation of the specific actions directed to reducing losses and expenses, implementation of resource-saving technologies, enhancement of management structure and number of administrative and management personnel and acceptance of other measures.

At the same time the additional profit got by the organization as a result of economy of fuel and energy resources, raw materials and materials by enhancement of engineering procedures and implementation of modern resource-saving technologies is not subject to withdrawal.

In case of the next review of regulated rates to 50 percent of the saved means are considered as a part of net profit, and costs for fuel and energy resources, raw materials and materials are accepted taking into account the specified expense rates applied as a result of implementation of modern resource-saving technologies.

18. The payment amount of services of water supply and the sewerage is calculated on 1 person a month proceeding from rates for the population and regulations of water consumption (sewerage) established by Council of Ministers of the Republic of Karakalpakstan, khokimiyats of areas and the city of Tashkent depending on extent of improvement of housing stock, and in the presence of measuring devices payment is made according to their indications.

2. Services of heat supply (production and transportation of heat energy)

19. Expenses on development of heat energy and servicing of thermal networks, control of work of subscriber inputs, automatic devices on regulation of temperature, pressure and consumption of water enter into structure of expenses on production and transportation of heat energy.

20. For calculation of rate for services of heat supply for wholesale consumers it is necessary to determine the income of the heatsupplying organizations for amounts of the released heat energy taking into account all consumers of services which consist of production cost of services for the specific accounting period (year) taking into account perspectives of development of this industry for the next period (year) and expected influence of external factors (the change in price for energy resources, materials, rates for transportations, the tariff charges and official pay rates), the normative term of duration of heating season (S), necessary profit (Monday) (according to the formula given in Item 15 of this provision).

21. When forming rates for services of heat supply of funds (government subsidies), allocated from the government budget for carrying out capital repairs of the boiler equipment and thermal networks, are excluded from costs of the heatsupplying organizations.

According to article 129 of the Tax Code of the Republic of Uzbekistan, the income from government subsidies does not join in comprehensive income in case of the taxation.

Expenses on carrying out capital repairs of the boiler equipment and thermal networks are considered as a part of costs when forming rates in missing part of the financial resources determined according to address lists taking into account the depreciation charges, the funds allocated from the budget, and other sources of financing.

22. When forming rates per unit of service of heat supply indirect material costs, overheads of production nature, indirect costs on work, expenses of the period and expenses are determined by financial activities by the relation to the salary of production personnel.

23. Calculation of the amount of net profit and level of profitability when forming rate is made according to Item 6 of this provision.

 The paragraph two of Item 23 is excluded according to the Resolution of the Ministry of Finance of the Republic of Uzbekistan, the Ministry of Economics of the Republic of Uzbekistan, the Uzbek Agency "Uzkommunkhizmat" registered by the Ministry of Justice of the Republic of Uzbekistan of 12.05.2014 No. 2198-1)

24. In case of approval or the subsequent review of rates for services of heat supply of 10 percent from increase in rates become covered for the income account of the heatsupplying organization. For this purpose the organization finds internal reserves of receipt of additional incomes or cost reduction by creation of the specific actions directed to reducing losses and expenses, implementation of resource-saving technologies, enhancement of management structure and number of administratively managerial personnel and acceptance of other measures.

At the same time the additional profit got by the organization as a result of economy of fuel and energy resources, raw materials and materials by enhancement of engineering procedures and implementation of modern resource-saving technologies is not subject to withdrawal.

In case of the next review of regulated rates to 50 percent of the saved means are considered as a part of net profit, and costs for fuel and energy resources, raw materials and materials are accepted taking into account the specified expense rates applied as a result of implementation of modern resource-saving technologies.

25. Rates for the population are established:

on services of central heating - on 1 sq.m of the heated area a month;

on hot water supply in the absence of metering devices - on 1 person a month;

in the presence of the device considering only consumption of hot water - for 1 CBM of hot water;

26. Rates for the population for central heating and hot water supply are calculated, proceeding from:

costs of costs for 1 Gcal of heat;

the established rate for wholesale consumers;

the settlement heat energy spent for heating of 1 sq.m of the heated square and at heating of 1 CBM of water in the Gcal expected by the organization according to established procedure of determination of thermal loadings and consumption rates of fuel, the electric power, heat power and water development and transportation of heat energy, and also regulations of technological losses.

The size of standard rates of consumption of heat energy on central heating and hot water supply for the population is developed and affirms Council of Ministers of the Republic of Karakalpakstan, khokimiyats of areas and Tashkent according to the resolution of the Cabinet of Ministers of the Republic of Uzbekistan of July 30, 1996 N 271 "About approval of regulations in connection with phased transition on self-sufficiency of housing and communal services".

27. Features of determination of cost when forming rates is the following:

cost of services of the organizations of heat supply is determined taking into account preventive maintenance and repair of the boiler equipment and thermal networks according to the planned organizational and technical actions for leaving, supervision, servicing and preventive repair of the equipment and thermal networks;

in case of forecast calculation of costs of loss are provided in limits of the regulations established by the legislation;

in case of realization of heat energy at the same time on central heating and hot water supply expenses under Articles of calculation shall be estimated in proportion to amount of heat energy on central heating and hot water supply;

material costs on services of heat supply are determined proceeding from consumption rates of technical salt or other materials replacing it per CBM of hot water (heat carrier) and the prices established on them;

costs for power and lighting energy are calculated according to specific consumption rates of the electric power, installed capacity of the energy equipment and applicable fares on 1 kWh and on 1 kW of installed capacity.

28. Sample calculation of determination of rates for the population for services of heat supply is given in appendix to this Provision.

III. Final provision

29. This Provision is approved with the State committee of the Republic of Uzbekistan on demonopolization and development of the competition.

 

Appendix

to Regulations on procedure for forming of rates and introduction of limit of profitability on utilities

See Appendix (4Kb In original language)

 

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