Summary
- Uzbekistan has introduced a simplified VAT regime with a reduced 6% rate for eligible small businesses, mainly in catering, trade, and services, as part of a broader tax reform package effective from June 2026.
- The reform also increases the turnover threshold for switching to the general tax regime, allowing more SMEs to remain under simplified taxation and reducing administrative pressure on growing businesses.
- The measure is designed to improve compliance and reduce tax complexity, while giving businesses the option to choose between simplified VAT treatment and the standard VAT system, depending on their structure and input VAT needs.
Article
The reform represents a significant shift in Uzbekistan’s indirect tax framework, aimed at supporting SME growth while improving tax system efficiency. By introducing a voluntary 6% VAT option and raising eligibility thresholds, the government is reducing administrative friction for smaller businesses while maintaining VAT coverage through a simplified model. However, the removal of input VAT deductions under the simplified regime means businesses must carefully evaluate whether the new system is financially beneficial depending on their cost structure and supply chain.
Primary Sources
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