Improving Taxation System to Ensure Financial Stability in Uzbekistan: A Comprehensive Analysis and Reform Strategy

This study examines the current taxation system in Uzbekistan and proposes comprehensive reform strategies to enhance financial stability. Through analysis of tax revenue dynamics (2019-2025), international comparisons, and evaluation of structural challenges, we identify key areas requiring immediate attention: broadening the tax base, improving compliance mechanisms, optimizing tax rates, and strengthening digital infrastructure. Our research shows that even if Uzbekistan has a tax-to-GDP ratio of 21.3% (2023), it would be below the optimal level for sustainable development. We construct an analytical framework whereby fiscal sustainability can be evaluated, and we also suggest a gradual implementation process. The study even finds that, when combined with an enhanced administrative capacity to collect taxes, these tax reforms can lead to revenue gains of 15-20% within three years. All without undermining economic competitiveness. Our recommendations include transitioning to progressive personal income taxation, reducing VAT exemptions, implementing property taxation reform, and digitizing tax administration systems.