Improving the Methodology of Profit Taxation

This research delves into the refinement of profit taxation methodology within the broader framework of Uzbekistan’s ongoing economic transformation. As one of the principal instruments of fiscal policy, the profit tax serves not only as a stabilizing mechanism for macroeconomic balance but also as a vital stimulus for entrepreneurship and a consistent source of state revenue. Yet, despite its centrality, persistent methodological gaps remain in defining an optimal tax base and ensuring that taxation mechanisms correspond to the dynamic realities of modern enterprise. Employing analytical and comparative approaches, the study examines both domestic and international experiences in profit taxation, tracing their evolution and assessing current practices. The analysis indicates a steady and deliberate reduction of Uzbekistan’s profit tax rate from 36 percent in 1997 to 15 percent by 2025 signaling a strategic policy orientation toward fostering investment, business expansion, and competitiveness. Global comparisons reveal similar trajectories in corporate taxation, suggesting that moderate rates can enhance fiscal efficiency without undermining state revenue. The findings highlight that an effective profit tax system must reconcile two imperatives: maintaining fiscal sustainability and supporting entrepreneurial vitality through transparency, simplicity, and equity in tax administration. Furthermore, the study advocates for adaptive reforms in response to economic modernization, including revised income thresholds for advance payments and reduced burdens for newly eligible taxpayers. Such refinements are projected to strengthen business capacity, improve compliance, and secure budgetary resilience. Ultimately, the research underscores the necessity of methodological precision in profit taxation as a cornerstone of sound economic governance and sustainable private sector growth.