The article examines the impact of tax policy reforms in Uzbekistan during 2018–2024 on the development of small and medium-sized enterprises (SMEs).  The analysis is based on information from Stat.uz, reports from international financial institutions like the World Bank, IMF, ADB, and IFC, and evaluations from professional consulting firms like EY and PwC. According to the findings, the ratio of SMEs to GDP has remained constant over time, remaining between 40 and 55 percent. Digital tax services (such as online reporting and the SOLIQ mobile application) have reduced the administrative burden on entrepreneurs and encouraged the shift to the formal sector.  At the same time, while the system of tax incentives supported the investment climate, their broad and generalized application limited overall efficiency.  Moreover, the large share of the informal economy (30–35 percent) and constraints in access to finance continue to restrict the full positive impact of tax policy.

 Although credit lines from international financial institutions have helped improve SMEs’ short-term liquidity, gaps in the financing market still remain.  Therefore, the policy recommendations include: linking tax incentives to specific targeted outcomes, expanding digital services alongside improving financial literacy, and introducing inclusive financial instruments to reduce the size of the informal economy.

Tax policy, Small business, Tax administration, Informal economy, SME financing, Digital tax services, Tax incentives, Economic reforms

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