Uzbekistan to Reduce Fines and Simplify Tax Reporting for Businesses

Tashkent, Uzbekistan (UzDaily.com) — The Legislative Chamber and the Senate of the Oliy Majlis of Uzbekistan have adopted a law aimed at reducing fines for tax reporting violations, modifying tax inspection procedures, and expanding tax incentives for entrepreneurs. The document has been forwarded for consideration by the President of the country.

As reported on 3 December during a session of the Legislative Chamber by Deputy Minister of Economy and Finance Akhadbek Khaydarov, the bill was developed in line with the main directions of the 2026 tax and budget policy and in consideration of initiatives proposed by entrepreneurs during a dialogue with the President in August. The primary goal of the law is to improve tax administration and reduce the administrative burden on businesses.

Specifically, the law provides for the application of a single fine for the late submission of reports across multiple types of taxes, along with a significant reduction in administrative penalties. For officials of small business entities, fines will decrease from 10 to 3 basic estimated values (BEV), and for individuals — to 1 BEV. Over the first nine months of this year, fines were imposed on 111.9 thousand enterprises totaling 956.4 billion soums.

The law also introduces a provision whereby no fine will be applied for delays of up to five days in submitting reports if the entrepreneur had filed reports on time over the previous three months. In the first nine months of the year, approximately 6 thousand entrepreneurs were fined 2.8 billion soums for such minor delays.

Self-employed individuals will be allowed to sell goods based on an invoice. The law also introduces a mechanism for collecting tax arrears from the taxpayer’s accounts receivable and stipulates that suspension of a VAT payer certificate for more than 30 days can occur only through court procedures.

Additionally, tax authorities will be responsible for automatically generating tax reports for property tax, land tax, personal income tax, social tax, VAT, and turnover tax. Taxpayers will also be able to pay financial penalties resulting from field tax audits in equal installments over six months.

Starting from 1 January 2026, for a period of one year, financial penalties will not apply to taxpayers who are transitioning from turnover tax to VAT and corporate income tax for the first time. Furthermore, the law proposes a procedure for voluntary liquidation of businesses with turnover up to 10 billion soums and a medium level of tax risk, based on conclusions from tax consultants and auditors.

The law significantly expands the list of tax benefits. In particular, until 1 January 2028, a 1% profit tax and social tax rate will apply to enterprises selling fruits and vegetables in modern packaging. Until 2030, creators of children’s content, national films, and series will be exempt from corporate income tax, and a social tax rate of 1% will be applied for them.

Tax incentives are also extended to cotton-textile clusters, greenhouse farms, agricultural cooperatives, residents of creative parks, jewelry manufacturers, operators of electric vehicle charging stations, and the National Investment Fund.

The law also explicitly applies a zero VAT rate to services provided to aircraft directly at airports in Uzbekistan during international transport operations.

At the same time, the document provides for tightening certain tax parameters. For instance, corporate income tax rates for e-commerce entities are proposed to increase from 10% to 15%, and turnover tax rates from 3% to 4%. Minimum bases and rates for property, land, and water taxes, as well as subsoil use tax, will rise by 7%.

The government expects that these changes will create more predictable and favorable conditions for business operations while ensuring the sustainability of state budget revenues.