The proposal was presented during a discussion on tax policy held in Tashkent on July 30.
According to the institute's experts, the recommendation is aimed at strengthening vertical equity in the country's tax system by aligning tax rates more closely with individuals' income levels.
"We believe it would be appropriate to move to a progressive personal income tax system in the near to medium term. Uzbekistan introduced a flat 12% income tax rate in 2019. However, considering the growth in personal incomes and other economic factors, a progressive tax scale is now becoming more relevant. The country aims to achieve upper-middle-income status in 2026, and this brings new requirements. Most upper-middle-income and developed countries use progressive income taxation. From this perspective, it is important to begin planning the transition," institute representatives said.
The experts noted that the institute carried out analytical work in 2025 based on the conclusions and recommendations of the International Monetary Fund (IMF). At the same time, they stressed that an immediate transition to a progressive tax system is neither feasible nor under consideration, describing it instead as a medium-term objective intended to improve the fairness of the tax system.
They added that work on the proposal is still ongoing and that the institute has not yet finalized its calculations.
"Our proposals and estimates on introducing a progressive tax scale are still being developed. We do not believe the analysis is complete enough to publish at this stage. Our future research will present specific proposals on tax brackets and expected outcomes," the institute said.
Representatives of the institute emphasized that its role is limited to developing and publishing policy recommendations. Any decision on whether to adopt or reject the proposal falls within the authority of the Ministry of Economy and Finance and other relevant government bodies.
Uzbekistan has applied a flat personal income tax rate of 12% since 2019.
