Uzbekistan Quality Job Creation as a Cornerstone for Sustainable Economic Growth

Private Sector Development and Access to Finance
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Small business and private entrepreneurship development are clearly 
incorporated in the third pillar of the national development strategy (economic 
development). In line with the strategy’s five priority areas, several reforms are 
being implemented, including foreign exchange market liberalization and tax 
reforms. Related to small business and private entrepreneurship development, 
a new SME definition has been effective since January 2019, including a new 
category of medium enterprises, which enables the government to target 
viable SMEs in implementing its growth strategies. 
Ongoing tax reforms are bringing some benefits to SMEs. SMEs are benefiting 
from the simplified business income tax regime, which offers a unified tax 
payment of 5% for wholesale trade, 1%–4% for retail trade, 10% for public 
catering services, and the unified social tax of 15% (Table 4.3). In this scheme, 
SMEs are exempted from corporate income tax, property tax, mandatory 
contribution to state funds, value-added tax, and other local taxes and duties. 
In 2017, 141,965 enterprises (94% of all enterprises) enjoyed the simplified tax 
regime (IMF 2018). However, requirements of the current simplified regime 
will need to be adjusted to the new SME definition, as the standard regime 
may be applied for medium enterprises under the new definition due to the 
employment threshold. This means that corporate income tax, property tax, 
mandatory contribution to state funds, and a 20% value-added tax will be 
levied on medium enterprises.
Table 4.3: Tax on Business Income, Uzbekistan, 2017
Tax Regime
Requirements
Components
Conditions
Standard
• Legal entities 
with more 
than 200 
employees
• Corporate income 
tax: 14%
(profit based)
• Property tax: 5% 
(asset value 
based)
• Mandatory 
contribution to 
state funds: 3.2% 
(turnover based)
• 9,592 enterprises (6% of the 
total legal entities, 2017)
• Corporate income tax: 0.6% of 
GDP (2017)
• Property tax: 0.9% of GDP 
(2017)
• Mandatory contribution to 
state funds: 9.3% of GDP 
(2017)
Simplified
• Legal entities 
with 200 
or fewer 
employees
• Trade and 
catering firms
• Unified tax 
payment:
(i) wholesale 
trade 5%,
(ii) retail trade 
1%, 2%, or 4%, 
and (iii) public 
catering 10%
• Unified social tax: 
15%
• 141,965 enterprises (94% of the 
total legal entities, 2017)
• Designed for micro and small 
enterprises
• Exempt from corporate income 
tax, property tax, mandatory 
contribution, value-added tax, 
and other local taxes/duties
GDP = gross domestic product.
Source: Based on Michielse et al. (2018).

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