Uzbekistan Shadow Economy Halves Since 2019

Tashkent, Uzbekistan (UzDaily.uz) — The level of the unobserved economy in Uzbekistan decreased from 50% of GDP in 2019 to about 25% by 2025, according to preliminary calculations in the Fiscal Strategy for 2027–2029.

The target is to reduce the indicator to 20% of GDP by 2029, compared with a global average of 11.8% and 19.7% in upper-middle-income countries.

A presidential decree dated 10 December 2025 set target indicators through 2030: reducing the share of the unobserved economy in GDP 1.3-fold, increasing the share of non-cash payments by the population in trade and services to 75%, and expanding formal employment.

Measures to achieve these goals include simplifying conditions for business transitions from the informal to the formal sector, expanding options for transitioning from a simplified tax regime to the general system, reducing scrutiny for compliant taxpayers, and countering artificial business splitting and revenue concealment.

Special attention will be focused on sectors with high cash transaction volumes — retail trade, public catering, construction, real estate rental, agriculture, and transportation.

Medium-term tax policy goals include reviewing corporate profit tax and personal income tax exemptions, optimizing VAT exemptions to ensure supply chain continuity, improving VAT refund mechanisms, and raising rates on excise taxes, resource taxes, and property tax in line with inflation. A methodology for assessing "tax expenditures" will be developed in collaboration with international organizations.

New policy directions include implementing green taxation principles, gradually introducing specific tax rules for Islamic financing, and harmonizing tax and customs policy with World Trade Organization requirements.

Real estate taxation based on market value determined through mass appraisal results is also being improved.