One of the most persistent structural barriers to small business growth in Uzbekistan has been a tax threshold problem: once a company’s annual turnover approached a certain ceiling, it was required to transition to the general tax regime. The complexity and administrative burden of that regime made scaling economically counterproductive — pushing many entrepreneurs to cap their growth rather than absorb the costs of compliance. A new decree signed by President Shavkat Mirziyoyev moves to address this directly.
The core change: five times more room to grow
Effective June 1, 2026, the mandatory transition threshold to the general tax regime has been raised to 12,000 times the base calculation unit — approximately 5 billion soums. The previous threshold stood five times lower.
The practical effect is significant: the point at which growth triggered a heavier tax burden is no longer a deterrent. Businesses can scale without restructuring their operations to stay below an artificial ceiling.
What else the decree introduces
Businesses in retail, food service, and services may voluntarily adopt a simplified 6% VAT rate through 2030. Under this arrangement, corporate income tax is set at 0% and profit tax reporting obligations are waived.
On compliance, the decree establishes thresholds below which tax inspections will not be initiated: until 2028, no audit will be launched where identified tax risk falls below 500 million soums, and no field inspection where it falls below 100 million soums. Businesses will instead be given the opportunity to self-correct before any enforcement action.
The practice of suspending VAT registration certificates — which could halt business operations immediately — has been abolished. Food service operators will receive a 40% refund on VAT paid, irrespective of the share of cashless transactions. Same-day registration of daily and seasonal workers via mobile application has also been introduced.
The broader direction
The decree signals a shift in regulatory posture — from penalty-driven compliance toward removing friction from legitimate growth. For startups and small businesses, the immediate implication is operational: the incentive to suppress turnover is gone, and the path to scaling on a sound legal footing is clearer.
