Information on measures taken to reduce the share of the shadow economy in the Republic of Uzbekistan

The measures taken to reduce the share of the shadow economy in the Republic of Uzbekistan consist of the following 5 sections:

1.    The experience of foreign countries was studied.

As a result, the negative impact of the shadow economy on society and the state, which is widespread in foreign countries, was identified, and they are:

• Violation and non-transparency of the competitive environment;

• Decrease in quality and quantity of products;

• Decrease in tax revenues to the state budget;

• Increasing the tax burden to support social and economic institutions;

• It consisted of a slowdown in economic growth.

At the same time, the most common and widely used methods of assessing the shadow economy in foreign countries were studied and divided into two categories: direct and indirect. While direct methods are based on direct observations and tax audits, indirect methods are based on the transaction method, the currency the demand method, the energy consumption method, the difference between cost and revenue statistics, the difference between official and actual labor, and the MIMIC model.

2.    Work done at the first level.

According to the Decree of the President of the Republic of Uzbekistan PD-6098, the following areas have been granted benefits:

·        Construction companies;

·        Catering establishments;

·        Realtors.

In addition, commissions and structures have been established consisting of the Ministry of Economic Development and Poverty Reduction, the Ministry of Finance, the Central Bank, the State Tax Committee and the State Committee on Statistics.

According to Resolution of the Cabinet of Ministers of the Republic of Uzbekistan №394, the following tasks were identified: an effective system for the widespread introduction of digital technologies in industries and sectors of the economy; increasing the volume of cashless payments in the economy; increasing the popularity of banking services; improving the mechanisms for identifying "shadow economy"; introduction of an effective system for reducing the share of the "shadow economy" in foreign trade and organization of extensive work to reduce the share of the "shadow economy".

3.    Implemented measures.

In collaboration with World Bank experts, projects such as the Strategy for Reducing the Share of the Shadow Economy in 2021-2025 and the Methodology for Assessing the Shadow Economy (based on the MIMIC model) are being developed.

According to the Resolution of the Cabinet of Ministers №1 from January 7, 2021, the following tasks were identified: the tasks of introducing an automated system of inspections of enterprises; establishing procedures for types of inspections; analysis of "suspicious" enterprises. Also, the ministries and agencies are conducting analysis of sectors with a high share of the shadow economy, the abolition of existing benefits and preferences, the implementation of the program "Risk analysis", the preliminary results of observations, the assessment of the shadow economy by industry, "money laundering" and money laundering. countermeasures, prize-winning games on "checks" and the assessment of the shadow economy by the monetary method.

4.    Measures planned to be implemented by the Ministry of Economic development.

In cooperation with international organizations, it is planned to develop a long-term concept and assessment methodology, review statistical reports and cover the share of the shadow economy in macro indicators.

Together with ministries and agencies, it is planned to develop a system of cashless settlements, simplify the tax system and ensure equal tax burden, improve the competitive environment and liberalize markets and ensure budget transparency and raise public awareness.

5.    Indicators of the shadow economy.

In accordance with the analysis and research, the shadow economy in the world is 8.0% in the United States, 36.5% in Brazil, 21.7% in Spain, 19.5% in Italy, 18.5% in Portugal, 18.4% in Korea, 14.5% in China and 11 in Canada. , 0%, 10.2% in Germany, 9.6% in the UK, 9.0% in Australia, 8.6% in Singapore and 8.1% in Japan. As for the countries of Central Asia (calculations based on the MIMIC model) in 2019 it was 52.11% in Uzbekistan, 40.76% in Tajikistan, 36.65% in Kazakhstan and 30.53% in Kyrgyzstan.

This analytical material is prepared by the specialists of the Shadow Economy Analysis Unit Z. Akhmedov, R. Badalov and M. Akhmedov, it is presented as the result of a preliminary study conducted on the basis of the data of the World Bank experts.