President Shavkat Mirziyoyev has reviewed a package of proposals aimed at easing tax and administrative pressure on small businesses in Uzbekistan, including changes that would allow entrepreneurs to remain under the simplified tax regime for longer.
Small businesses play a major role in Uzbekistan’s economy, supporting jobs, incomes and competition. Officials said some current tax rules have started creating barriers for business growth.
Under existing regulations, businesses with annual revenue of up to UZS 1bn ($78,000) can use a simplified tax regime. Once they exceed that amount, they move to the general tax system, which requires paying value-added tax and profit tax and involves more reporting requirements.
Officials noted that the UZS 1bn ($78,000) threshold was introduced in 2019 and has not changed despite rising prices in recent years. According to the presentation, some entrepreneurs approaching the threshold have chosen to limit reported turnover or split operations into separate entities to avoid moving to the general tax regime.
To address this, officials proposed raising the threshold from UZS 1bn ($78,000) to UZS 5bn ($390,000) starting June 1, 2026. The change would allow more businesses to continue using the simplified regime as they grow, reducing paperwork and giving entrepreneurs more room to expand before moving to the standard tax system.
A simplified VAT payment option was also proposed for businesses in catering, trade and services. Under the plan, entrepreneurs could voluntarily pay VAT at a 6% rate and remain exempt from profit tax, or continue operating under the current general system.
Officials said the proposal is intended to simplify tax payments and reduce compliance costs. VAT administration was also reviewed during the presentation.
Businesses that move to VAT currently face nearly twice as many reporting requirements, while 77% of taxpayers found to have reporting errors in 2025 were VAT payers.
To ease the process, officials proposed automatic VAT refunds for low-risk businesses, removing the temporary suspension of VAT certificates, reviewing mandatory VAT requirements tied to imports and automating bank account opening procedures.
Additional proposals focused on reducing administrative pressure. Entrepreneurs would be able to correct certain reporting mistakes independently, while tax audits would not be carried out in cases involving tax risks of up to UZS 500mn ($39,000).
Field inspections would also not apply where risks are up to UZS 100mn ($7,800). Separate relief measures were also proposed for the catering and hotel sectors, including simpler employee registration and updated rules for cash sales.
Officials estimate the package could expand legal growth opportunities for more than 600,000 small businesses. The government also expects improved tax transparency to generate at least UZS 2trillion ($156mn) in additional annual budget revenue.
Mirziyoyev approved the proposals and instructed officials to continue simplifying tax administration and expanding digital services for entrepreneurs.
Small and medium-sized businesses continue to dominate the country’s commercial sector. As of May 1, Uzbekistan had 425,800 active commercial organizations, including more than 36,400 family businesses, according to official statistics.
