The Institute for Reducing the Share of the Shadow Economy, Improving Tax and Customs Administration, and Fiscal Analysis at the Ministry of Economy and Finance has put forward an initiative to unify the approach to paying the social tax for individual entrepreneurs (IEs) and self-employed individuals in Uzbekistan. This idea was presented during a fiscal dialogue on July 30th.
Currently, both categories use the same basic calculation unit (BCU) of 412 thousand soms, which will increase to 440 thousand soms starting September 1st. However, the frequency of payments differs.
According to Part 1 of Article 408 of the Tax Code, IEs are obliged to pay the social tax monthly in an amount of no less than one BCU, equivalent to 5.28 million soms per year. Self-employed individuals, according to Part 2 of the same article, have the option to voluntarily pay 1 BCU per year to count this period towards their employment record. After the BCU increase, their annual payment will be 440 thousand soms, which is approximately 36.7 thousand soms per month.
The presentation noted that the financial burden on an individual entrepreneur is twelve times higher than the burden on a self-employed person. This difference is partly due to the fact that IEs, unlike self-employed individuals, can hire up to five employees and conduct retail trade, giving them a broader scope of activity and additional opportunities.
The Institute recommends abandoning the existence of two parallel systems with significant differences in payment amounts and transitioning to a single category of self-employed individuals. International experience is cited as a reference, where contributions are usually tied to declared income or minimum wage.
The proposal is to calculate the minimum social tax based on the minimum wage (MW) rather than the BCU. Applying the basic rate of the social tax established by Article 405 of the Tax Code to an MW of 1.36 million soms would result in a monthly payment of 163.2 thousand soms, or almost 1.96 million soms per year.
At the same time, the proposed amount would be approximately 4.45 times higher than the current voluntary payment of self-employed individuals (about 36.7 thousand soms per month), but it would be 2.7 times less than the minimum payment that IEs would have to make after the BCU increase.
The Institute does not insist on introducing a one-time targeted payment. Instead, it proposes starting with a monthly contribution of about 50 thousand soms, followed by a gradual increase to 163.2 thousand soms according to an approved schedule.
It is important to note that this initiative represents an analytical proposal from the Institute and does not yet have the status of an adopted legislative act or bill.
As of July 1, 2026, 375.1 thousand individual entrepreneurs were registered in the country. The number of self-employed individuals varies across sources—from 2.8 million to 5.5 million.
Economist Otabek Bakirov stated that the principle of equality when revising the social tax should apply not only to IEs and self-employed individuals but also to enterprises that benefit from 1% preferential or reduced rates. He suggested considering the introduction of a minimum mandatory payment for such beneficiaries, similar to the procedure for paying land tax and property tax by some exempted legal entities. Bakirov emphasized: 'Strength becomes justice only when it is applied equally not only to the weak and small, but also to the strong and large. Only then does trust in such justice appear.'
Furthermore, it was learned in mid-July that the authorities plan to make pension contributions mandatory for self-employed individuals. Currently, 2.8 million self-employed individuals are registered in Uzbekistan, but only about 800 thousand people, or 30%, voluntarily make the corresponding contributions. The existing system allows a self-employed person to pay one BCU—412 thousand soms—and receive one year of service for pension purposes.
The 'On Social Work' law has come into force in Uzbekistan, significantly transforming methods of providing social support. According to this legislative act, targeted assistance will now be provided based on individual plans, taking into account not only the financial situation but also the general life circumstances of the recipients.
The law, which entered into force on July 23, marks a transition to a preventive model of work. This implies that social difficulties must be detected and resolved at the earliest stages. To implement this concept, an institute of professional social workers is being created, whose activities will cover a wide range of institutions, including polyclinics, schools, employment centers, courts, internal affairs bodies, and correctional facilities.
The methodology for determining need is changing: in addition to income level, the entire life situation of the person or family will be analyzed when providing assistance. Based on a comprehensive assessment, a personal social support plan is developed for each situation, adapted to specific requests.
The National Agency for Social Protection has been appointed as the authorized body responsible for coordinating the entire system. The law also defines the competencies of the Cabinet of Ministers, executive authorities, and local administrations. Mahallas, non-profit organizations (NPOs), business representatives, and citizens themselves will be integrated into the decision-making process.
The document establishes the types of social services provided, regulates the procedures for recognizing citizens as needy, and defines the grounds for starting and terminating support, including funding sources. Furthermore, the law legalizes the activities of social workers, securing their official status, defining measures for their state social protection, and establishing professional frameworks and limitations on their work.
The six-month period for payments of child benefits and material assistance, which were assigned in February 2026 to families deemed needy, is nearing its end in Uzbekistan. These payments will cease in August, and their further extension will be directly dependent on whether able-bodied family members are employed.
The National Agency for Social Protection warns that the state will stop providing funds if an able-bodied family member has not had official employment within the last six months. Support will also cease if a citizen has rejected a suitable job offered by the Employment Service two or more times.
To avoid losing state aid and ensure the continuity of payments, able-bodied citizens must officially confirm their employment. This can be done by signing an official employment contract, registering as an individual entrepreneur with regular tax payments, or obtaining the status of a self-employed person with full payment of the social tax.
The department emphasized that child benefits and material assistance are intended exclusively to support families that are genuinely in need. Consequently, the main condition for receiving these payments remains the active participation of able-bodied citizens in official employment activities.
According to the Fiscal Strategy for the period 2027–2029, prepared by the Ministry of Economy and Finance, it is projected that the average pension amount in Uzbekistan will reach 1.8 million soums in 2027. This figure exceeds the level of 1.7 million soums recorded in 2026.
It is expected that the number of citizens receiving pensions may increase by 165 thousand, reaching a total of 4.592 million people. It is projected that the Pension Fund's expenditures in 2027 will amount to 95.7 trillion soums, which is 11.1% more than expected in 2026. The growth in these expenditures is partly due to the increase in the number of pensioners.
It is planned that the fund's income will increase by 14%, reaching 73.8 trillion soums. The main source of revenue remains the social tax, which is forecast to bring in 71.4 trillion soums. To cover a possible deficit and ensure timely payments from the republican budget, 23 trillion soums are planned to be allocated, corresponding to the 2026 level.
Medium-term forecasts show a further increase in the number of pension recipients: 4.76 million people are expected in 2028, and 4.94 million in 2029. Accordingly, the average pension amount is forecasted at 1.9 million soums in 2028 and 2.1 million soums in 2029. By 2029, the fund's total expenditures may rise to 119.4 trillion soums.
The Ministry of Economy and Finance warns that without implementing reforms, the dependence of the pension system on state financing during the 2027–2029 period will remain high. Key problems noted include informal employment, which limits the fund's income base, and the existence of social tax benefits for certain legal entities.
To improve coverage by the pension system, it is proposed to gradually transition self-employed individuals who currently do not pay social tax to paying it. Additionally, citizens with official earnings may be given opportunities to voluntarily pay social tax for non-working family members to build their service record. Furthermore, the possibility of gradually abolishing and limiting the provision of new social tax benefits is being considered.
As of June 1, there were over 4.35 million pension recipients in Uzbekistan. These categories include about 3.6 million people receiving old-age pensions, 484.5 thousand receiving disability pensions, and another 260.6 thousand due to loss of breadwinner. Overall, the average pension amount in the country was 1.58 million soums, but as of July 1, this figure increased by an average of 7%. In the capital, Tashkent, the average pension amount was significantly higher—2.16 million soums.
