President Approves Reforms to Boost Small Business Growth

Tashkent, Uzbekistan (UzDaily.com) — The President of the Republic of Uzbekistan, Shavkat Mirziyoyev, reviewed a presentation of proposals aimed at creating more favorable economic conditions and improving the regulatory environment for the development of small business entities.

It was noted that small businesses play a key role in the country’s economy, providing employment, income, and a competitive market environment. In recent years, Uzbekistan has consistently implemented measures to support entrepreneurship, reduce tax burdens, and simplify government procedures.

At the same time, it was pointed out that certain existing mechanisms limit the natural expansion of businesses. In particular, when turnover exceeds 1 billion soums, small business entities transition to the general tax regime, including value-added tax and corporate income tax. This threshold was set in 2019.

Proposed changes to the tax system

During the presentation, it was proposed to increase the threshold for transitioning to the general tax regime from 1 billion to 5 billion soums starting June 1, 2026. An initiative was also discussed to introduce a simplified VAT payment mechanism for enterprises in catering, trade, and services, allowing them to choose a 6% rate with exemption from corporate income tax or to retain the existing regime.

These measures are intended to reduce administrative burden, simplify tax accounting, and decrease incentives for revenue concealment and business fragmentation.

Administration and control

The analysis also examined challenges in VAT administration. According to the data presented, the volume of reporting requirements for VAT payers has doubled, and 77% of tax reporting errors in 2025 were attributed to this category of taxpayers.

In this regard, measures were proposed to automatically refund negative VAT balances for low-risk businesses, cancel temporary suspension of VAT registration certificates, revise mandatory VAT registration rules for import operations, and automate bank account opening procedures.

It was also proposed to reduce administrative pressure by expanding entrepreneurs’ rights to independently correct errors and limiting tax audits: audits would not be conducted for risks below 500 million soums, and on-site inspections would be restricted for risks below 100 million soums.

Support for small business and expected impact

Additional measures concern the catering and hospitality sectors, including simplified procedures and regulations. According to estimates, the proposed changes may affect more than 600,000 small business entities. The expected additional budget revenues are projected to reach at least 2 trillion soums per year.

President Shavkat Mirziyoyev approved the presented proposals and instructed relevant agencies to further improve conditions for small businesses, simplify tax administration, and implement digital solutions.