Tax Reforms in Uzbekistan: Recent Changes and Economic Impact

Abstract

This article analyzes the recent tax reforms implemented in Uzbekistan and evaluates their impact on the country’s economic development during the period of 2017–2025. In recent years, Uzbekistan has carried out large-scale fiscal reforms aimed at reducing the tax burden, improving tax administration, and increasing the efficiency of public finance management. For instance, the number of major taxes was reduced from 13 to 9, while the corporate income tax rate decreased from 14% to 12%, and the value-added tax (VAT) rate was lowered from 20% to 15%. The reforms also focused on the digitalization of the tax system, including the introduction of electronic tax reporting, online cash registers, and automated VAT refund mechanisms. As a result, tax revenues have shown steady growth, with state budget revenues increasing by more than 1.5 times between 2018 and 2024. Additionally, the share of the shadow economy has gradually declined, while the number of registered businesses has significantly increased. The article examines the impact of these reforms on key economic indicators such as GDP growth, investment inflows, and business activity. In particular, foreign direct investment (FDI) inflows have increased, exceeding several billion US dollars annually in recent years. The reforms have also contributed to improving Uzbekistan’s position in international rankings related to ease of doing business and tax transparency. Despite these positive outcomes, certain challenges remain, including issues of tax compliance, administrative efficiency, and the need for further institutional reforms. The study concludes that Uzbekistan’s tax reforms have created a more transparent and business-friendly environment, but continuous improvements are necessary to ensure sustainable economic growth and global competitiveness.