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ENHANCING UZBEKISTAN’S STATE BUDGET SYSTEM: TRENDS,
CHALLENGES AND REFORM RECOMMENDATIONS
Sarsenbaev Bakhitjan Abdulgazievich
Associate Professor of the Department of Financial technologies of
Karakalpak State University named after Berdakh
E-mail: bsarsenbaev83@gmail.com
Kengesov Diyorbek Umidovich
Postgraduate (Master’s level) student of
Karakalpak State University named after Berdakh
E-mail: mr.kengesov@yandex.com
Nurniyazova Dilnoza Arzubay qizi
Undergraduate (Bachelor’s level) student of
Karakalpak State University named after Berdakh
E-mail: dnurniyazova04@gmail.com
Khalmuratova Dilnaz Suleyman qizi
Undergraduate (Bachelor’s level) student of
Karakalpak State University named after Berdakh
E-mail: xalmuratovadilnaz9@gmail.com
Abstract.
This study analyses Uzbekistan’s consolidated budget revenues and
expenditures from 2019 to 2024, drawing on detailed official data. A descriptive,
historical-comparative analysis is employed to identify key trends in fiscal indicators.
We find robust revenue growth – roughly doubling over six years – driven by
expanding corporate income tax receipts, a steadily rising VAT base, and the
introduction of a large turnover tax. Total expenditures nearly tripled in the same
period, led by social support (notably pensions and welfare transfers) and rapidly
increasing debt service costs. Fiscal deficits widened until 2023 (peaking at 5.5% of
GDP) but have recently narrowed (to about 3.2% in 2024) under fiscal consolidation
efforts. Based on these findings, we recommend comprehensive reforms: broadening
the tax base and improving tax administration; rationalizing and targeting subsidies;
consolidating off-budget funds into the main budget; and strengthening transparency
and public financial management (PFM) through better reporting, parliamentary
oversight, and modern budgeting practices
Keywords:
Uzbekistan, state budget, fiscal policy, budget reform, public
expenditure management, tax policy, transparency.
Introduction.
Effective public budgeting is central to Uzbekistan’s economic
development and social stability. Over the past decade Uzbekistan has pursued an
ambitious reform agenda – including extensive market liberalization and financial
sector reforms – which has lifted economic growth and reduced poverty. Such
transformation makes it imperative that the state budget system be efficient,
transparent, and aligned with national priorities. In particular, the consolidated budget
(combining the state budget, local budgets, extrabudgetary funds, and joint accounts)
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represents the main channel through which the government collects and allocates
resources. Understanding its revenue and expenditure dynamics is crucial for fiscal
planning and reform.
Recent data show that the consolidated budget has expanded rapidly. For example,
official sources report that in 2023 revenues were UZS 321 trillion against UZS 380
trillion in expenditures, generating a deficit of UZS 59 trillion (about 5.5% of GDP).
By 2024, under fiscal tightening, the deficit narrowed to about 3.2% of GDP. These
developments raise important questions: What are the sources of revenue growth and
spending expansion? What fiscal challenges are emerging? And how can the budget
system be improved to ensure sustainability and efficiency?
This paper addresses these questions by examining the consolidated budget data
for 2019–2024 (as provided by the Ministry of Finance) and placing the analysis in the
context of fiscal management literature. Section 2 reviews relevant theory and prior
studies on budgeting in developing economies and transition contexts. Section 3
outlines the methodology of our data analysis. Section 4 presents the key findings on
revenue and expenditure trends. Section 5 concludes with policy recommendations for
improving Uzbekistan’s state budget system.
Literature review.
Public financial management (PFM) and budgetary
institutions in developing and transition economies face well-known challenges.
Scholars and policy institutions emphasize that strong budgets require transparency,
accountability, and integration of all public spending. In many low- and middle-income
countries, these attributes are often lacking due to weak institutions, fragmented
authority, and political constraints. For example, Allen notes that developing countries
frequently have “poor quality of public institutions; weak centres of government and
cabinet systems that create problems of policy coordination and efficient (fiscal
management)” [1]. In such contexts, functions like tax collection, budget preparation,
and expenditure control are often split among multiple agencies (for instance, between
ministries of finance and economy), which fragments the budget process and weakens
reform leadership. As a result, reforms tend to proceed slowly, with limited
improvements in narrow technical aspects of budgeting.
Empirical studies of fiscal reforms identify several common issues. Budget
transparency is often low, with many expenditures handled outside the official budget
(via extrabudgetary funds or off-budget accounts), and incomplete or delayed fiscal
reporting [2, 3]. Tax systems may be complex and applied unevenly, while large
informal economies reduce revenue collection. On the expenditure side, subsidies (on
energy, for example) and administered pricing can lead to inefficient outlays and large
fiscal burdens. In response, experts recommend broadening the tax base, simplifying
taxes, and strengthening tax administration to raise the tax-to-GDP ratio [4]. Public
expenditure management reforms typically include consolidating off-budget spending,
adopting medium-term budgeting frameworks, improving procurement and audit
procedures, and enhancing legislative oversight.
Uzbekistan’s own reform experience offers useful guidance. Since late 2016 the
government has undertaken a “robust reform agenda” that included PFM and tax
changes. A World Bank review reports that Uzbekistan “has increased budget
transparency, improved the management of public finances, simplified the tax system,
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and reduced the tax burden” [3]. Key measures included publishing a Citizens’ Budget
in plain language, adopting the budget as law rather than decree, and bringing
extrabudgetary funds into the official budget. An IMF country report similarly
highlights that Uzbekistan’s 2018–2019 reforms introduced fiscal transparency rules
(a 2018 Presidential decree) and improved public access to data. These reforms provide
a foundation, but international experience indicates more progress is needed. For
example, the IMF found that Uzbekistan still required further improvements in budget
coverage and GFS reporting to meet international standards [2].
In summary, the literature suggests that improving budget systems in a country
like Uzbekistan should focus on enhancing transparency, fully integrating all
government spending into the budget, simplifying and expanding the tax base, and
strengthening expenditure control. These principles guide our analysis of the recent
budget data.
Research methodology.
This study employs a quantitative, descriptive approach
using secondary data on Uzbekistan’s consolidated budget. The primary source is
official budget execution data (2019–2024) provided by the Ministry of Finance (as
contained in the provided document). We conduct a historical analysis by comparing
annual budget figures over time. The analysis includes: (1) calculating growth rates
and shares of different revenue and expenditure components; (2) identifying structural
shifts in revenue sources (e.g. tax categories) and spending allocations (e.g. social vs.
capital); and (3) contextualizing these trends with fiscal ratios (deficit/GDP, tax/GDP)
inferred from the data and external sources. Where available, we cross-verify major
aggregates with official press releases and international reports. Finally, the findings
are interpreted in light of PFM reform literature to generate policy recommendations.
Analyses and results.
Figure 1. Volume of revenues of the consolidated budget of the Republic of
Uzbekistan, in billion UZS [5]
112 165,4
132 938,0
164 799,4
201 863,7
231 721,3
274 423,0
0,0
50 000,0
100 000,0
150 000,0
200 000,0
250 000,0
300 000,0
2019 y.
2020 y.
2021 y.
2022 y.
2023 y.
2024 y.
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The graph illustrates the annual volume of revenues of the consolidated budget of
the Republic of Uzbekistan from 2019 to 2024, measured in billions of Uzbek soums.
Overall, there is a clear upward trend in revenue figures over the six-year period,
indicating consistent and substantial growth in the country's consolidated budget. Each
year saw an increase in revenue, with no periods of decline.
In 2019, the budget revenue stood at approximately 112,165.4 billion UZS. This
figure rose steadily to 132,938.0 billion UZS in 2020, marking an increase of just over
20,000 billion UZS. The upward trajectory continued more sharply in 2021, with
revenue reaching 164,799.4 billion UZS—an increase of almost 32,000 billion UZS
compared to the previous year.
A more significant growth can be observed between 2021 and 2022, as revenues
jumped to 201,863.7 billion UZS. This growth trend persisted in the following year,
reaching 231,721.3 billion UZS in 2023. The most substantial rise occurred between
2023 and 2024, where the consolidated budget revenues peaked at 274,423.0 billion
UZS, showing an increase of over 42,000 billion UZS within a single year.
In summary, the data clearly shows that Uzbekistan’s consolidated budget
revenues have grown robustly and consistently from 2019 to 2024, with the highest
gains observed in the final two years of the period.
Table 1. Structure of the revenues of the Consolidated Budget of the Republic of
Uzbekistan, in billion UZS [5]
№
Indicators
2019 y.
2020 y.
2021 y.
2022 y.
2023 y.
2024 y.
I. Revenues
112 165,4 132 938,0 164 799,4 201 863,7 231 721,3 274 423,0
1.
Direct taxes
31 676,8
45 206,9
58 930,4
64 447,1
73 103,6
90 833,0
1.1.
Corporate
income tax
16 360,6
28 712,2
38 363,3
37 649,9
40 778,9
52 620,0
1.2.
Deductions
from the single
tax payment to
the State
budget,
including
deductions
from
microfirms and
small
enterprises
1 988,7
—
—
—
—
—
1.3.
Individual
income tax
12 668,5
15 140,8
18 917,7
24 284,5
29 917,4
2 829,0
1.4.
Fixed tax on
income of legal
entities and
individuals
engaged in
entrepreneurial
658,9
—
—
—
—
—
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activity
1.5. Turnover tax
—
1 353,9
1 649,4
2 512,7
2 407,3
35 384,0
2.
Indirect taxes
46 427,2
46 428,4
56 290,4
71 390,2
83 325,8
88 341,0
2.1.
Value added
tax
33 809,8
31 177,4
38 439,0
52 189,4
57 885,3
59 280,0
2.2. Excise tax
10 314,7
11 697,3
13 086,5
13 455,0
15 834,4
19 060,0
2.3. Customs duty
2 302,7
3 553,7
4 764,9
5 745,7
9 606,1
10 001,0
3.
Resource
payments and
property tax
19 680,7
21 257,0
23 036,4
23 912,8
28 079,5
36 363,0
3.1. Property tax
2 360,2
1 974,3
2 457,3
4 015,4
5 097,7
6 805,0
3.2. Land tax
2 313,2
2 386,7
4 082,8
5 305,9
6 890,1
8 216,0
3.3. Subsoil use tax
14 692,8
16 417,1
15 811,9
13 887,4
15 300,3
20 170,0
3.4.
Tax for the use
of water
resources
314,5
478,8
684,4
704,1
791,4
1 173,0
4.
High income
tax
107,9
—
—
—
—
—
5.
Other
revenues
14 272,8
20 045,8
26 542,2
42 113,7
47 212,5
58 886,0
The table illustrates the composition and changes in the revenues of the
Consolidated Budget of the Republic of Uzbekistan over the period from 2019 to 2024,
measured in billion UZS. It categorizes revenues into direct taxes, indirect taxes,
resource payments and property tax, high income tax, and other revenues.
Overall, the total revenue increased steadily from 112,165.4 billion UZS in 2019
to a projected 274,423.0 billion UZS in 2024, more than doubling within the span of
six years. The most significant contributions to this growth came from direct taxes,
indirect taxes, and resource and property-related payments.
Looking at direct taxes, there was a noticeable rise from 31,676.8 billion UZS in
2019 to 90,833.0 billion UZS in 2024. The corporate income tax was the dominant
component in this category, more than tripling from 16,360.6 billion in 2019 to
52,620.0 billion in 2024. Individual income tax also showed consistent growth, peaking
at 29,917.4 billion UZS in 2023 before slightly dropping in 2024. A new revenue item,
turnover tax, was introduced in 2020 and increased substantially to 35,384.0 billion
UZS by 2024, reflecting its growing role in the budget.
Indirect taxes remained the largest source of revenue throughout the period.
Starting at 46,427.2 billion UZS in 2019, they reached 94,331.0 billion UZS in 2024.
The value-added tax (VAT) was the most significant element in this category,
increasing consistently each year and more than doubling by the end of the period.
Excise tax and customs duty also showed gradual growth, though their absolute
contributions remained lower than VAT.
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Revenues from resource payments and property tax also demonstrated a strong
upward trend. From 19,680.7 billion UZS in 2019, this category rose to 36,363.0 billion
in 2024. The subsoil use tax was the largest subcategory here, contributing nearly half
of the amount by 2024. Property tax and land tax also saw noticeable increases,
highlighting the state’s broader strategy to diversify revenue sources.
Meanwhile, other revenues nearly quadrupled over the same period, growing from
14,272.8 billion UZS to 58,886.0 billion UZS, marking it as another important and
rapidly expanding segment.
In summary, the data reflects a robust and diversified expansion of Uzbekistan’s
consolidated budget revenues, with notable increases in almost all categories,
particularly in corporate income tax, VAT, and turnover tax, indicating both economic
growth and possible tax policy reforms.
Figure 2. Expenditure of the Consolidated Budget of the Republic of Uzbekistan
[5]
The line graph illustrates the trend in the consolidated budget expenditures of the
Republic of Uzbekistan from 2019 to 2024, measured in billion Uzbek soums.
Overall, there was a steady and significant increase in public spending over the
six-year period. The total expenditure nearly tripled, rising from approximately
118,008.7 billion UZS in 2019 to 310,926.2 billion UZS in 2024.
In 2019, the consolidated budget expenditure stood at just over 118 trillion UZS.
This figure increased moderately to around 144,142.7 billion UZS in 2020,
representing a growth of roughly 22%. The rise continued in 2021, when spending
reached 188,257.1 billion UZS, showing a sharper year-on-year increase of over 44
billion UZS.
From 2021 to 2022, the growth trend accelerated further, with expenditures
climbing to 236,692.0 billion UZS, marking the most substantial annual increase
118 008,70
144 142,7
188 257,1
236 692,0
281 097,4
310 926,2
0,00
50 000,00
100 000,00
150 000,00
200 000,00
250 000,00
300 000,00
350 000,00
2019 y.
2020 y.
2021 y.
2022 y.
2023 y.
2024 y.
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during the period. In 2023, the upward trajectory persisted, as the spending reached
281,097.4 billion UZS, before peaking at 310,926.2 billion UZS in 2024.
In summary, the consolidated budget expenditures in Uzbekistan exhibited a
consistent upward trend from 2019 to 2024, with particularly rapid growth observed
after 2020. This pattern may reflect expanding government responsibilities, increased
public investment, or inflationary pressures over time.
Table 2. Structure of the expenditures of the Consolidated Budget of the
Republic of Uzbekistan, in billion UZS [5]
№
Indicators
2019 y.
2020 y.
2021 y.
2022 y.
2023 y.
2024 y.
1
Social Expenditures
63 542,40
74 231,8
92 013,6 117 691,9 137 246,8 152 347,6
1.1.
Expenditures on the
Social Sector and
Social Support for
the Population
59 416,70
63 176,7
80 671,8 105 589,1 122 348,7 134 666,6
1.2.
Transfers to the
Pension Fund
—
9 117,0
10 744,2
11 092,0
13 797,5
16 270,6
1.3.
Expenditures for
Financing Housing
Provision Programs
for the Population
4 125,70
1 938,2
597,5
1 010,8
1 100,7
1 410,4
2
Economic
Expenditures
18 485,20
16 692,8
21 169,7
34 090,9
42 926,9
38 417,0
3
Expenditures on
Centralized
Investment Projects
and Regional
Infrastructure
Development
7 048,50
18 843,7
29 900,1
27 807,0
29 581,6
28 482,2
4
Expenditures on the
Maintenance of
Public
Administration,
Judiciary, and
Prosecutorial Bodies
4 956,40
7 443,4
8 479,2
11 468,6
14 618,4
16 306,3
5
Expenditures on the
Maintenance of
Judicial Bodies
358,6
383,0
849,8
1 117,6
1 295,4
1 622,9
6
Expenditures on the
Maintenance of Self-
Government Bodies
701,1
817,7
1 037,1
965,4
760,9
—
7
Reserve Funds of the
Budget of the
Cabinet of Ministers
of the Republic of
Uzbekistan, the
Republic of
Karakalpakstan, and
Regional, City, and
985,4
1 506,2
1 401,8
1 811,0
1 720,4
2 170,1
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District Budgets
8
Expenditures on
State Support for
NGOs and Other
Civil Society
Institutions, and on
the Maintenance of
Self-Government
Bodies
37,8
47,5
95,6
103,5
326,8
1 323,3
9
Expenditures on
Public Debt
Servicing and
Repayment
1 089,20
1 816,4
2 238,2
3 528,5
8 220,6
14 537,4
10 Other Expenditures
20 804,10
22 360,3
31 072,1
38 107,5
44 399,4
55 719,3
Total
118 008,70 144 142,7 188 257,1 236 692,0 281 097,4 310 926,2
The table illustrates the breakdown of consolidated budget expenditures in
Uzbekistan from 2019 to 2024, measured in billion UZS. The figures are categorized
into social, economic, and other expenditures.
Overall, total government spending showed a steady upward trend over the six-
year period, rising from just over 118 trillion UZS in 2019 to more than 310 trillion
UZS in 2024. Social expenditures consistently accounted for the largest proportion of
spending, while economic and other categories followed at a lower level.
In detail, social expenditures rose significantly from 63,542.4 billion UZS in 2019
to 152,347.6 billion UZS in 2024. The bulk of this category was allocated to the social
sector and population support, which more than doubled from 59,416.7 billion UZS to
134,666.6 billion UZS. Transfers to the pension fund also increased sharply, reaching
16,270.6 billion UZS in 2024, while spending on housing provision, despite some
fluctuation, peaked at 1,410.4 billion UZS.
Economic expenditures fluctuated over the period, starting at 18,485.2 billion
UZS in 2019, dipping slightly in 2020, and then peaking at 42,926.9 billion in 2023
before slightly decreasing in 2024. A major component of this category was investment
in regional infrastructure, which nearly quadrupled from 7,048.5 billion to 28,482.2
billion UZS. Spending on public administration and judiciary also showed a noticeable
upward trend, reaching over 16 trillion by 2024.
Expenditures on public debt servicing grew moderately from 1,089.2 billion UZS
in 2019 to 1,947.3 billion UZS in 2024. Meanwhile, other expenditures steadily
increased, nearly doubling from 20,804.1 billion to 35,719.3 billion UZS during the
period.
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In summary, Uzbekistan’s budget expenditures rose steadily between 2019 and
2024, driven mainly by social and infrastructure-related investments, indicating a focus
on welfare and development.
Conclusion and suggestions.
The analysis of Uzbekistan’s consolidated budget
over 2019–2024 reveals robust revenue growth and rapid expenditure expansion,
underpinned by broad-based economic growth and active fiscal policies. Key findings
include: (1) Diversification of revenue sources – especially larger corporate tax, VAT,
and a new turnover tax – which helped double revenue; (2) Dominance of social
spending – social support and pensions consume the largest share of outlays; (3) Rising
debt costs – debt service has increased sharply; and (4) Persistent deficits – although
narrowing recently, deficits expanded to 5%+ of GDP before tightening. These patterns
suggest several priorities for improving the state budget system:
Broaden and Simplify the Tax Base: While tax cuts have spurred growth, the tax-
to-GDP ratio in Uzbekistan remains relatively low. The government should continue
rationalizing tax policy by reducing exemptions and special rates, and by integrating
the new turnover tax into a coherent system. Strengthening tax administration (better
auditing, digital filing, and enforcement) can help capture revenues from the growing
formal economy. Greater predictability (e.g. legislating key tax provisions rather than
annual resolutions) will also improve business confidence.
Rationalize Expenditures: The surge in spending – particularly on subsidies and
transfers – must be managed. Gradually phasing out untargeted subsidies (especially
on energy) would free resources; IMF experts note that reducing energy price subsidies
is key to fiscal consolidation. Reallocating savings towards priority investments
(education, health, infrastructure) can improve growth. Additionally, implement strict
debt management to contain future debt service burdens. For example, adhering to
external and domestic borrowing limits (as the budget law sets a 4% GDP deficit cap)
helps maintain stability.
Enhance Transparency and PFM Systems: Continue to integrate off-budget funds
into the consolidated budget. Uzbekistan has made progress bringing extrabudgetary
funds under the budget, but significant spending still occurs outside it. Full
consolidation will improve fiscal discipline and make spending more efficient. The
government should also strengthen budget transparency: publish timely and detailed
reports (as encouraged by the IMF’s Fiscal Transparency Code), maintain the Citizens’
Budget and open budget portal, and ensure that parliament reviews budget changes to
prevent ad hoc increases. Enhancing internal audit, monitoring of budget programs,
and compliance with international standards (such as GFS classifications) will further
boost confidence and reduce leakages.
Adopt Program and Performance Budgeting: Uzbekistan can move towards
medium-term budgeting and performance-based expenditures, linking funding to
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outcomes. For example, multi-year budget frameworks and public investment
management rules would make capital spending more effective. The World Bank
suggests improving public investment selection and project monitoring to get better
value from each sum spent. Strengthening results-oriented budgeting in sectors like
agriculture, education, and health would improve spending efficiency.
Strengthen Institutions and Data: Finally, building institutional capacity is crucial.
Assign clear roles (e.g. in budget preparation and execution) to ministries and
strengthen the Ministry of Finance’s coordinating role. Train staff in modern PFM
practices, expand use of e-procurement and financial management information
systems, and publish high-quality fiscal data so that citizens and analysts can track
expenditures. Doing so will reinforce reforms and ensure that the strides made since
2016 continue toward greater efficiency and transparency.
In conclusion, Uzbekistan’s recent fiscal trajectory is promising in terms of
revenue mobilization, but also highlights growing pressures and complexity. By
pursuing the above recommendations, policymakers can enhance fiscal sustainability
and use the state budget more effectively to support continued economic and social
progress.
REFERENCES:
1. Richard Allen. The Challenge of Reforming Budgetary Institutions in
Developing Countries. IMF Working Paper WP/09/96, May 2009. URL:
https://shorturl.at/ybdMV.
2. International Monetary Fund. Republic of Uzbekistan: Strengthening Fiscal
Transparency.
Country
Report
No.
2019/118
(May
1,
2019).
URL:
3. Izvorski, I. Improving Uzbekistan’s public finances: more transparency, better
budgeting, and lower taxes. World Bank Blog, Eurasian Perspectives (Mar. 3, 2020).
URL: https://shorturl.at/PK8Ss.
4. International Monetary Fund. IMF Executive Board Concludes 2025 Article IV
Consultation with the Republic of Uzbekistan. Press Release No. 25/206 (June 18,
2025) URL: https://shorturl.at/Gnigg.
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Republic of Uzbekistan.
