Current Challenges in the Income Tax System of Uzbekistan and Ways of Improvement

This study analyzes the income tax system in Uzbekistan and identifies ways to improve its effectiveness and equity. Applying OLS regression on the 2000–2023 data, and using a quadratic model showing a reflection of the Laffer curve, the optimal income tax rate is 14.47–14.54% and can potentially boost annual average GDP growth by 2.8 percentage points. The existing flat 12% rate hits the wallets of low-income households most and incentivizes employment in the shadow economy. A progressive tax system, consistent compliance, and policies aimed at reducing informality are key to achieving equitable, efficient, and inclusive economic growth as the study highlights.