Main Directions in Improving State Budget Policy Yarmatov Sharofiddin Choriyevich

Analysis and Results

One of the main tasks of the state is to ensure economic and social equality of all segments of society and to stabilize the economy in all respects. Such stabilization is achieved through monetary policy as well as fiscal policy. Fiscal policy is a set of measures, including changes in government expenditures and taxes, aimed at ensuring full employment, balance of payments and economic growth in the context of non-inflationary GDP. [7] In essence, the state budget is part of the national financial system of the country's financial system and has all the features of the financial system.

At the same time, the state budget has its own characteristics, which in turn, separate the state budget from other parts of the financial system and allow it to occupy a central place in it. In each country, although the state is the organizer of all financial relations, this quality, that is, its role as the main distributor of the country's material and financial resources, is reflected only in the budget. In order for the state budget to implement expenditures, it is necessary to first form a portion of revenues. The formation of income in a modern market economy depends on several factors. The most important of these is the growth of gross domestic product in the economy and the tax burden provided by this growth. Despite a number of political and social changes in the world since our transition to free conversion, sustainable economic growth has been achieved over the last 3 years. (Figure 1)

(The diagram is based on statistics by the author)

Figure 1. Growth of GDP and tax burden in Uzbekistan, in percent.

Looking at the data in the table above, in 2017, GDP grew by 5.3 percent and the tax share in GDP grew by 11.5 percent. In 2018, GDP growth was 5.1% year-on-year and taxes on GDP were 11.2%. In the last year, GDP increased by 5.6 percentage points, exceeding expectations by 0.2 percentage points, and significantly, the tax rate in GDP decreased by 0.5 percentage points compared to 2017 and by 0.2 percentage points compared to 2018. It should be noted that in these 3 years, the share of taxes in GDP has decreased, but tax revenues to the state budget are growing from year to year, and this process is expected to continue in the future. We can see this process in the diagram below. In 2019, we have developed a draft medium-term budget, according to which the Ministry of Finance has provided the following forecasts of the state budget for 2019-2021. (Figure 2)