Mechanisms of the Impact of Tax Incentives on Household Income Growth (Empirical Analysis)

The main purpose of this study is to examine the role of tax incentives as a fiscal instrument in increasing real household incomes under inflationary conditions and to identify effective mechanisms through which tax incentives influence income growth. Using the case of Uzbekistan, the study aims to assess how tax incentives interact with household income dynamics, domestic demand, and macroeconomic stability, as well as to develop evidence-based policy recommendations. The research employs a mixed-method approach combining theoretical analysis and simplified empirical assessment. The study is based on official statistical data from the State Statistics Agency of the Republic of Uzbekistan and the Ministry of Economy and Finance for the period 2019–2024. Comparative analysis, logical analysis, and systemic approaches are used to examine the structure of household incomes and tax incentives. Empirical assessment is conducted through the analysis of growth rates of nominal and real household incomes, consumer price index (CPI), and tax incentives, as well as ratio-based comparisons to identify relationships among these indicators. The results indicate that tax incentives have played a significant role in supporting the growth of real household incomes in Uzbekistan. Periods characterized by higher growth rates of tax incentives were associated with substantially stronger real income growth. The findings also show that tax incentives did not lead to a sharp acceleration of inflation, suggesting their effectiveness as a stabilizing fiscal tool.