New tax relief expected for small businesses

An important and long-awaited update for entrepreneurs has been announced. At a meeting chaired by the head of state, a proposal was put forward to increase the threshold for transitioning to the general tax regime for small businesses from 1 billion UZS to 5 billion UZS, effective June 1, 2026.

This initiative could provide significant relief for small business representatives. Previously, entrepreneurs whose turnover exceeded the set limit were forced to switch to the general tax regime. Raising the threshold to 5 billion UZS will allow many entrepreneurs to continue operating under a simplified system.

A further important proposal was made, particularly for the trade, catering, and service sectors. It is planned to introduce a simplified procedure for paying value-added tax (VAT) for entrepreneurs operating in these areas.

According to the proposal, entrepreneurs will be able to voluntarily pay VAT at a 6% rate, thereby becoming exempt from corporate income tax. At the same time, any entrepreneur will retain the right to continue working under the current general procedure. This means business owners can choose the regime that suits them best based on their activities, turnover, and financial situation.

The most important aspect here is that it offers a choice rather than a mandate. The 6% simplified VAT regime may be convenient for some, while others may prefer the general regime. Such an approach creates flexibility for businesses.

Small business is one of the most active segments of the economy. Thousands of jobs are created in trade, catering, and services. Rational tax relief can increase the interest of entrepreneurs in formal operations and encourage them to report turnover transparently.

Furthermore, increasing the threshold from 1 billion UZS to 5 billion UZS will have a positive psychological and practical impact on business growth. Entrepreneurs will worry less about falling into a heavier tax regime due to increased turnover, which encourages them to expand, hire new staff, and develop their operations.

Of course, the practical implementation of these proposals, including specific mechanisms and calculations, will be clarified in subsequent documents. However, the idea itself is seen as a significant relief and a new opportunity for small businesses.

In short, it has been proposed to increase the threshold for transitioning to the general tax regime for small businesses to 5 billion UZS starting June 1, 2026. For trade, catering, and services, a 6% simplified VAT regime may be introduced. For entrepreneurs, this is truly like a holiday gift—now it just needs to be implemented in a way that is practically convenient.