SHADOW ECONOMY AND TAX POLICY: STRATEGIES OF FORMALIZATION AND LEGALIZATION BASED ON THE EXPERIENCE OF UZBEKISTAN
Keywords:
Shadow economy, tax policy, formalization strategies, legalization, tax administration, informal employment, digital economy.Abstract
As economic reforms in Uzbekistan deepen, the scale of the shadow economy and its integration into the formal sector are becoming increasingly important. This article analyzes the concept of the shadow economy, its formation factors, and its manifestations in the conditions of Uzbekistan. The main goal of the study is to assess the effectiveness of tax policy measures implemented by the state to reduce the size of the shadow economy and identify ways to improve existing mechanisms. Methodologically, the article studied dynamic changes based on statistical analysis, tax revenues, and official employment indicators. Also, the practical results of formalization strategies were assessed through an analysis of regulatory legal acts adopted during 2017–2024. According to the results, measures such as reducing cash turnover, simplifying tax benefits, and introducing electronic invoices played an important role in reducing shadow activity. However, the share of informal labor in small businesses still remains high.
