Levying Taxes on the Shadow Economy

The shadow economy (also known as the informal or underground economy) is a pressing issue in economic policy for many countries today, including Uzbekistan. This article provides a comprehensive analysis of identifying, assessing, and taxing the shadow economy. It explores the nature of the shadow economy, the reasons for its formation, its economic and social consequences, and its impact on the formal economy. The article also sheds light on how these processes can be regulated through the tax system. In particular, the article examines international experiences in combating the shadow economy, including the leading approaches of countries such as the European Union, the United States, the Russian Federation, and South Korea, and develops proposals and recommendations tailored to the conditions of Uzbekistan. The study analyzes the size of the shadow economy and the measures being taken against it, based on the Tax Code of the Republic of Uzbekistan, data from the State Tax Committee, statistics from the World Bank, the International Monetary Fund, and other international organizations. The article also proposes mechanisms such as the use of modern digital technologies to identify shadow economic activity, increasing the efficiency of tax administration, encouraging cashless payments, and optimizing tax incentives. The author argues that reducing the shadow economy can increase state budget revenues, expand the tax base, and ensure macroeconomic stability. This article serves as a useful resource for economists, tax policy specialists, government officials, and researchers working in the field of digitalization of the economy. The research results provide an important basis for developing strategic decisions aimed at reducing the share of the shadow economy in Uzbekistan and increasing the effectiveness of its taxation.