Ways to Reduce Tax Burden for Small and Medium-Sized Businesses: International Experience and Uzbekistan

This study investigates the principal mechanisms and international best practices for reducing the tax burden on small and medium-sized enterprises (SMEs), with particular emphasis on the fiscal policy experience of Uzbekistan during 2018–2024. Employing a comparative policy analysis framework supplemented by regression-based estimation, the research quantifies the impact of targeted tax relief measures on SME formalization, revenue growth and employment generation. The findings indicate that the transition to a differentiated SME tax schedule — combined with reductions in the unified tax rate, broadened threshold eligibility and digitized compliance procedures — is associated with a 34% increase in registered SMEs, an estimated contribution of 0.38 percentage points to GDP growth per annum, and a measurable decline in informal employment. Drawing on comparative evidence from the EU, Georgia, Kazakhstan and Singapore, the paper identifies a taxonomy of seven core tax-burden-reduction instruments and evaluates their applicability to transition economies.