The authorities plan to review tax incentives, simplify taxation of small businesses, improve VAT refunds and switch to "green taxation". These measures are envisaged in the Fiscal Strategy 2026-2028, unveiled by the Ministry of Economy and Finance.

As stated in the Strategy, one of the key medium-term objectives of tax policy is to create equal conditions for entrepreneurs, provide level playing of the tax system and the sustainability of budget revenues. It also provides for swift harmonization of the tax system with the requirements of the World Trade Organization (WTO).

In particular, it is planned to improve income tax rates:

• ensuring horizontal equality in income taxation for individuals and legal entities, revising tax incentives for income tax and optimizing income tax rates;
• simplifying taxation of small businesses and the self-employed;
• tightening the provision of social tax benefits to ensure the sustainability of Pension Fund revenues.

Ensuring horizontal equality in taxation of income of individuals and legal entities is the principle according to which individuals with the same level of income should be taxed equally, regardless of the form of doing business or the source of income.

Currently, there are cases when different categories of taxpayers pay taxes at different rates or enjoy benefits, despite similar incomes - this is a violation of horizontal equality. For example, a school teacher pays 12% personal income tax, while a wealthy entrepreneur withdraws income through corporate expenses or dividends (at a 5% rate), and not in the form of a salary.

In addition, it is planned to ensure the integrity and continuity of the value-added tax (VAT) chain, including continuing work to optimize VAT benefits and improve VAT refund mechanisms.

It is also expected that excise rates for local and imported alcoholic beverages will be unified in accordance with WTO requirements, excise rates will be indexed taking into account the inflation rate, and the list of excisable goods will be revised and the mechanism for calculating this tax will be improved.

The government plans to revise resource tax rates to stimulate environmental protection:

• improving the tax system for the use of water resources in order to stimulate their efficient use;
• gradual introduction of a system for determining the market value of real estate for tax purposes throughout the republic and subsequent reduction of real estate tax rates on this basis;
• analysis of the effectiveness of all provided benefits for resource taxes and preparation of proposals for their cancellation.

Another goal is to reduce tax benefits and increase economic efficiency in order to create a fair, transparent and stable tax environment. To this end, it is planned to develop a methodology for assessing tax expenditures in cooperation with international organizations, as well as to increase the share of non-cash payments and ensure the transparency of goods flows in the economy.

According to the strategy, Uzbekistan also plans to annually raise salaries, pensions and allowances at a level above inflation, with the authorities preparing for "goal-oriented budgeting".