As Uzbekistan prepares to implement sweeping tax reforms to support small businesses and self-employed individuals, neighboring Tajikistan continues to operate under a more complicated and layered tax framework for entrepreneurs.
Starting January 1, 2026, Uzbekistan will reduce the turnover tax rate for individual entrepreneurs (IEs) and self-employed citizens earning up to 1 billion soums ($81.105 million) annually to just 1 per cent, down from the current 4 per cent, The Caspian Post reports via Tajik media.
The move, announced on the official website of the Uzbek president, is designed to formalize income streams, boost entrepreneurship, and simplify administrative processes. This reform is part of a broader initiative to digitize public services and encourage cashless payments nationwide.
Self-employed workers such as tutors, hairdressers, and freelancers in Uzbekistan can register quickly via the Soliq tax app and pay a fixed social tax of 108,000 soums (around $8.70) monthly. They are exempt from income and turnover taxes until annual earnings exceed 100 million soums ($8,100). Meanwhile, registered individual entrepreneurs continue to pay a 4 per cent turnover tax plus the same social tax, alongside sector-specific fees, including ecological and tourism levies.
Beginning November 2025, Uzbek entrepreneurs will also benefit from advanced digital tools such as QR code payments, tap-to-pay technology, and biometric signatures. Daily salary disbursements via e-wallets and mandatory QR codes for retailers will further modernize the business environment. Notably, having a traditional bank account will no longer be mandatory as digital wallets will suffice for transactions.
Tajikistan’s Tax System Remains Traditional and Complex
In contrast, Tajikistan does not recognize a separate legal category for self-employed individuals. All small business activities must be registered through patents or certificates, with a new “special conditions” certificate introduced in April 2024 for professions like photography, tutoring, and performance art, regardless of income.
Tajikistan’s tax system features two main regimes:
Patent-based entrepreneurs pay a fixed monthly fee covering income and social taxes, with fees varying significantly based on the region and sector-for example, truck operators pay 830 somonis ($88.58) monthly, while those using tractors or scooters pay 80 somonis ($8.54).
Certificate-based entrepreneurs pay income taxes ranging from 13 per cent to 20 per cent, plus a 20 per cent employer social tax (and 2 per cent for employees). Those under simplified taxation pay 6 per cent of gross income or 13 per cent of net income, plus a 1 per cent social tax.
Foreign nationals and stateless persons (excluding recognized refugees) are subject to double the tax rates imposed on locals.
Different Paths, Different Futures
These contrasting approaches highlight Uzbekistan’s aggressive efforts to simplify taxation, reduce barriers, and foster entrepreneurship through digital innovation, while Tajikistan maintains a more traditional and multi-tiered taxation system, which experts say could stifle small business growth.
Industry analysts recommend that Tajikistan focus on reducing bureaucratic obstacles, enhancing tax transparency, and lowering entry costs for new entrepreneurs to unlock the sector’s full potential, ultimately driving broader economic growth and improving livelihoods.
