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DIGITAL TRANSFORMATION AND FISCAL POLICY IN UZBEKISTAN:
TRENDS IN E-COMMERCE, REMOTE BANKING, AND DIGITAL
SERVICE TAXATION
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@mail.com
Abtract.
This study examines the rapid digital transformation of Uzbekistan’s
economy through a statistical analysis of three interrelated domains: tax revenues from
foreign electronic service providers, the growth of e-commerce trade volume, and the
increasing adoption of remote banking services. Utilizing official data from 2016 to
2024, the research identifies significant upward trends in all three sectors. Tax revenue
from companies such as Meta, Google, and Apple surged following Uzbekistan’s 2020
digital VAT reform, reflecting successful integration of global digital services into the
national tax framework. Simultaneously, the e-commerce market exhibited exponential
growth, and the number of remote banking users increased nearly fivefold between
2019 and 2024. These developments signal a comprehensive shift toward a digital
economy. The paper concludes with strategic policy recommendations to enhance
infrastructure, promote digital inclusion, and ensure sustainable growth through
supportive regulation and innovation ecosystems.
Keywords:
Digital economy; Uzbekistan; E-commerce; Remote banking; Digital
taxation; VAT on electronic services; Digital transformation; Statistical analysis; ICT
development; Fintech.
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Introduction.
Uzbekistan’s economy is undergoing a rapid digital transformation
under an ambitious national agenda. In 2020 the government launched the “Digital
Uzbekistan 2030” strategy and mobilized large investments in digital infrastructure.
For example, Uzbekistan planned over $2.5 billion in fibre-optic and broadband
expansion during 2021–22 [1]. By early 2023 the country had roughly 31 million
internet users, with high-speed mobile coverage nearing 98–99%. This broad
connectivity has fuelled strong growth in online activity: e-commerce revenue reached
an estimated $1.39 billion in 2021, comprising over 90% of the country’s total digital
services market [2]. International experts note that Uzbekistan’s e-commerce sector
has the fastest-growing contribution to GDP in recent years (with a compound annual
growth rate of ~372% from 2017–2022) [1]. In tandem, the financial sector has
embraced digitalization: “online banking has emerged as a crucial component of this
digital revolution,” enabling customers to manage finances and make payments
remotely [3]. In fact, a UNDP assessment observes that “digitalisation in Uzbekistan
has been led by the banking and financial services sector, which remains predominantly
state-owned,” with private firms only just beginning to adopt advanced digital tools
[1]. These trends toward a “cashless” economy have occurred alongside significant
fiscal reforms: since 2020 foreign internet companies providing electronic services to
Uzbek consumers must register and pay VAT, integrating them into the tax system.
Early evidence shows this policy is yielding substantial revenue. According to official
data, in the first half of 2024 sixty foreign e-service providers remitted UZS 48.4 billion
in VAT to Uzbekistan (up 50% year-on-year), with Meta, Google, and Apple alone
contributing over 80% of that amount. Thus, in just a few years Uzbekistan’s digital
services have become a rapidly expanding part of the economy, with far-reaching
implications for trade, finance, and public revenues.
Literature Review.
Recent studies on Uzbekistan’s digital economy highlight
four broad themes: the growth of e-commerce and ICT services; the emergence of
digital taxation; the rise of online banking and fintech; and the role of policy and
infrastructure in shaping these trends.
Digital Economy and E-Commerce Growth. Analyses by government and
international organizations document a surging digital sector. A UNDP study (2025)
reports that by 2022 e-commerce contributed about 1.2% to GDP and was the fastest-
growing segment of the ICT sector [1]. Similarly, market surveys find that
Uzbekistan’s e-commerce market nearly quadrupled in size from 2018 to 2022. KPMG
(2023) estimated the sector at $311 million in 2022 (about 2.2% of retail sales) and
projected it could reach $1.8–2.2 billion by 2027 (roughly 9–11% of retail) [5]. Other
research notes that widespread adoption of smartphones and online platforms has been
the main driver of this boom. For example, a country profile from the U.S. International
Trade Administration highlights the rapid expansion of Internet infrastructure and e-
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commerce initiatives (such as a national online trading platform launched in 2021) as
key enablers [2]. Despite these gains, the literature also warns that Uzbekistan remains
behind regional peers in ICT penetration; global rankings still show low software
spending and ICT exports, indicating room to further develop the digital economy.
The phenomenon of taxing foreign digital companies is well discussed in global
tax literature, and Uzbekistan has been at the forefront of this trend in Central Asia.
According to KPMG, Uzbekistan became one of the first countries in the region to
enact a digital services tax: effective January 1, 2020 all non-resident vendors of
electronic services to Uzbek consumers (B2C) must register and collect VAT [4]. In
practice this means foreign tech giants are now systematically paying Uzbek taxes on
the ads, software, and online goods they sell to Uzbek users. An EY tax bulletin notes
that by late 2024 dozens of international internet companies had been issued notices by
Uzbek authorities to report and pay VAT on past electronic sales [6]. These reforms
mirror international trends (many countries introduced similar taxes in the 2018–2023
period) and have significant revenue impact. Indeed, recent news reports from
Uzbekistan’s Tax Committee indicate that a small number of foreign tech firms
dominate digital VAT collections: in H1 2024, Meta, Google, and Apple alone
accounted for roughly 80% of the UZS 48.4 billion collected from 60 registered
providers [7]. This suggests that digital taxation is quickly becoming an important
component of the fiscal base. At the same time, academic analyses caution that fully
integrating global digital services into national tax regimes poses challenges – for
example, ensuring compliance, dealing with low-value transactions, and aligning with
international BEPS guidelines – issues that Uzbek policymakers must continue to
address.
The acceleration of remote banking and fintech in Uzbekistan is another area well
documented in the literature. Several studies have traced the rise of online banking as
a government priority [12]. Shermamatova finds that Uzbekistan’s government and
central bank have deliberately promoted online banking as a way to modernize the
financial sector and expand inclusion [3]. By digitizing payment systems and
encouraging banks to offer mobile apps, the authorities aimed to shift the population
away from cash. Empirical reports confirm this strategy’s impact: a Visa research
report shows that the number of users of remote banking services surged 43% over
2020–2021 (to 14.5 million users), and by end-2022 over 30 million remote bank
accounts were active [8]. These findings align with other accounts which emphasize
that Uzbekistan’s banking sector – though historically state-controlled – is now the
leader in digital adoption. However, literature also points out that many small
businesses and rural people still have limited digital access, and those further efforts
(e.g. expanding broadband and improving financial literacy) are needed to bring the
remaining population online.
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In summary, recent literature (2018–2024) consistently characterizes
Uzbekistan’s digital economy as rapidly expanding but uneven. E-commerce and ICT
services are growing at record rates, foreign digital companies are newly tethered into
the tax system, and banking services are being transformed by digital platforms. At the
same time, analysts note that some infrastructure gaps and regulatory challenges
remain. These studies provide a broad context for our analysis of the statistical trends.
Research Methodology.
This study relies on quantitative analysis of official data
from Uzbekistan’s government and international agencies. We compiled time-series
data on key indicators – including e-commerce trade volumes, number of remote
banking users, and tax receipts from foreign digital services – from authoritative
sources such as the State Statistics Agency, Central Bank, and the Tax Committee, as
well as published reports by institutions like the World Bank, UNDP, and industry
research firms. Data visualization (bar and line charts) and descriptive statistics
(growth rates, percentage shares) were used to examine trends over time and compare
subcategories (e.g. tax revenue by company). The rationale for this approach is to
provide an empirical overview of the digital sector’s evolution: by using official figures
we ensure accuracy and relevance, and by focusing on aggregate trends we can identify
the major shifts shaping Uzbekistan’s economy. The methodology is primarily
descriptive and explanatory, aimed at informing policy through evidence (rather than,
for example, econometric modelling).
Analyses and results.
Figure 1. Taxes paid by foreign companies providing electronic services in
Uzbekistan in 2024 in millions of soums [9]
The bar chart illustrates the amount of tax paid in 2024 by various foreign
companies that provide electronic services in Uzbekistan, measured in millions of
soums. Overall, it is clear that Meta contributed by far the highest amount in taxes,
while companies such as TikTok, Xsolla, and Acca paid the least.
Among the listed companies, Meta stands out significantly, paying 41,700 million
soums in taxes. This is followed by Google and Apple, which also made substantial
41700
29000
27300
4100
3600
1400
1400
1,200
966.7
903
0
5000
10000 15000 20000 25000 30000 35000 40000 45000
Meta
Apple
Amazon
Вooking.соm
Netflix
Zoom
Acca
Xsolla
TikTok
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contributions, with 29,000 million and 27,300 million soums respectively. These three
tech giants were the top taxpayers, collectively accounting for the majority of total
taxes collected from foreign e-service providers.
In contrast, Amazon and Booking.com paid notably lower amounts, with figures
of 4,100 million and 3,600 million soums respectively. Mid-range contributors include
Netflix and Zoom, both of which paid an equal amount of 1,400 million soums, while
Acca followed closely behind with 1,200 million soums. At the bottom of the chart,
TikTok and Xsolla paid the least, contributing 903 million and 966.7 million soums
respectively.
In summary, the data indicates a substantial disparity in tax payments, with Meta,
Google, and Apple far ahead of the rest. The large differences likely reflect the scale
of these companies’ operations and revenues in Uzbekistan’s digital market.
Figure 2. Electronic commerce trade volume from 2016 to 2023 (Annual Data), in
billion soums. [10]
The bar chart illustrates the annual trade volume of electronic commerce in
Uzbekistan from 2016 to 2023, measured in billion soums. Overall, the data reveals a
dramatic upward trend throughout the period, with the most significant growth
occurring after 2019.
In 2016, the e-commerce trade volume was extremely low, starting at only 6
billion soums. It then experienced a gradual increase over the next two years, reaching
12.1 billion in 2017 and 40.9 billion in 2018. However, a noticeable surge began in
2019 when the volume jumped to 275.3 billion soums - almost a sevenfold rise
compared to the previous year.
The growth accelerated further in 2020, with the trade volume rising to 1,002.5
billion soums, nearly quadrupling the 2019 figure. This rapid expansion continued into
2021, reaching 5,978.7 billion soums. The most substantial increases occurred in the
6
12.1
40.9
275.3
1002.5
5978.7
10886.8
13263.8
2 0 1 6
2 0 1 7
2 0 1 8
2 0 1 9
2 0 2 0
2 0 2 1
2 0 2 2
2 0 2 3
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final two years of the period. In 2022, the volume more than doubled again to 10,886.8
billion soums, followed by another significant rise to 13,263.8 billion soums in 2023.
In summary, the chart demonstrates an exponential increase in e-commerce
activity in Uzbekistan over the eight-year span, particularly from 2019 onwards. This
surge likely reflects growing internet accessibility, digital payment adoption, and
consumer reliance on online platforms, especially during and after the COVID-19
pandemic period.
Figure 3. Number of users of remote banking services in Uzbekistan from 2019 to
2024 [11]
The line graph illustrates the number of users of remote banking services in
Uzbekistan from 2019 to 2024. Overall, the chart shows a consistent and significant
increase in the number of users over the six-year period, highlighting the growing
adoption of digital banking in the country.
In 2019, the number of users stood at approximately 10.2 million. This figure rose
moderately to around 13 million in 2020. However, a more pronounced increase can
be observed in the following years. By 2021, the number of users had grown to 18.7
million, marking a rise of nearly 6 million compared to the previous year. The upward
trend continued in 2022, with the figure reaching 28 million, indicating a surge of
almost 10 million users.
This growth accelerated further in 2023 when the number of remote banking users
reached over 39.3 million. By 2024, the user base expanded even more sharply to
approximately 49.4 million. In total, the number of users nearly quintupled between
2019 and 2024, reflecting a widespread digital transformation in the banking sector.
To conclude, the data demonstrates a strong and uninterrupted increase in the
number of remote banking users in Uzbekistan, likely driven by improved digital
infrastructure, enhanced financial technologies, and growing public trust and reliance
on online banking services.
10,244,561
12,958,853
18,705,514
28,045,953
39,359,087
49,423,366
0
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
2019
2020
2021
2022
2023
2024
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Conclusion and suggestions.
The statistical evidence highlights three clear
trends in Uzbekistan’s digital services. First, e-commerce is growing explosively.
Annual e-commerce trade has climbed from negligible levels in the mid-2010s to
multi-trillion-soum volumes by 2023, reflecting widespread internet adoption and
changing consumer behaviour. Official sources indicate the e-commerce sector’s
contribution to GDP has expanded at hundreds of percent per year and shows no signs
of slowing. Second, digital banking adoption is surging. The share of Uzbek
households with remote banking access has risen dramatically, from around 10 million
users in 2019 to nearly 50 million accounts by 2024 (a fivefold increase, as reported
by the Central Bank and corroborated by industry studies). This indicates that most
citizens now interact with banks digitally, reflecting both improved infrastructure and
bank-driven initiatives during the COVID era. Third, tax revenues from foreign digital
companies are rising sharply. Following the 2020 VAT law, receipts from global
internet firms (Meta, Google, Apple, etc.) have become material: in mid-2024 alone
they paid nearly UZS 48.4 billion – about 1.5 times more than in the first half of 2023.
These three trends reinforce one another: as more Uzbek consumers shop online and
use digital payments, foreign platforms generate more taxable transactions; meanwhile,
banks are modernizing to handle this new digital money flow.
Overall, the convergence of booming e-commerce, ubiquitous digital finance, and
effective taxation suggests Uzbekistan’s economy is in the midst of a true digital
transformation. The share of digital services in the economy is increasing, and the state
is capturing new revenue streams as a result. However, challenges remain: literature
and data both note that while growth rates are high, Uzbekistan still lags many peers in
absolute ICT usage and exports. Ensuring that the gains from digitalization are widely
shared (across regions, firm sizes, and demographic groups) will be a key policy task
going forward. In the next section we outline specific policy and practical measures to
sustain this positive momentum.
To build on these positive trends, Uzbek policymakers should consider a
multifaceted strategy combining infrastructure investment, skills development,
supportive regulations, and targeted incentives:
Accelerate Infrastructure Expansion. Continue expanding high-speed internet,
especially in underserved rural areas. Prioritize fibre-optic and next-generation
wireless coverage so that businesses and households nationwide can access digital
services. Improve affordability by supporting lower-cost data plans and community
network initiatives.
Enhance Digital Skills and Inclusion. Expand digital literacy programs in schools
and vocational training, focusing on coding, e-commerce, and financial technology.
Provide training and advisory support to SMEs and entrepreneurs to help them go
online (e.g. digital marketing workshops, “how-to” guides). Promote gender-inclusive
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outreach to ensure women and rural residents can participate fully in the digital
economy.
Support E-Commerce and Start-ups. Simplify registration and licensing for online
businesses, and maintain favourable tax treatments for e-commerce sales (such as the
current reduced rate on online revenue). Offer targeted grants or low-interest loans to
tech start-ups and small e-tailers. Expand logistics capacity (e.g. warehousing, delivery
services) through public–private partnerships so that online goods can be shipped more
efficiently. Encourage development of domestic e-commerce platforms and payment
gateways that cater to local needs and currencies.
Maintain Clear and Fair Tax Policies. Ensure that foreign digital service providers
continue to register and comply with VAT obligations (through outreach and efficient
enforcement). At the same time, monitor the impact of these taxes on consumers and
businesses. Consider phased or threshold-based VAT rules for very small suppliers to
avoid overburdening micro-entrepreneurs. Align Uzbekistan’s tax rules with
international standards (e.g. OECD digital tax guidelines) to give investors certainty.
Transparency in how digital tax revenues are used can also build public trust.
Promote Fintech and Modern Banking. Encourage banks to innovate further by
streamlining mobile app regulations and allowing new entrants (e.g. digital banks,
payment service providers). Strengthen interoperability of banking platforms (for
example, making it easier to send money between different apps and banks). Support
the proliferation of cashless payment points (POS terminals, QR payments) so that
citizens can transact digitally in more places.
Strengthen Cybersecurity and Data Protection. As more services go online, invest
in cybersecurity infrastructure and consumer protections. Update laws and standards
to protect user data and financial information. Public campaigns on safe Internet
banking and fraud prevention can reinforce trust.
Foster Technology and Innovation Ecosystem. Invest in incubators and
innovation hubs (building on the existing IT Park framework), and simplify regulations
for technology export and foreign cooperation (for example, maintain tax incentives
for IT companies). Encourage collaboration between universities, research institutes,
and the private sector to develop high-value digital skills and homegrown software
products. Consider special economic zones or visa programs (such as the IT Park visa-
IT initiative) that attract international tech talent to Uzbekistan.
By pursuing these measures, Uzbekistan can sustain its digital momentum, deepen
the impact of digital services on economic growth, and ensure that the benefits of the
digital economy are widely realized across the country.
References:
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1.
Ministry of Economy and Finance of the Republic of Uzbekistan, United Nations
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2.
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3.
Shermamatova I.O. DEVELOPMENT OF ONLINE BANKING IN THE
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4.
KPMG. Taxation of digitalized Economy: developments summary. June 11, 2025.
URL:
5.
KMPG. E-commerce in Uzbekistan. 2023. URL:
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EY Global. Uzbekistan tax authorities sending VAT notices to non-resident
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– National Statistics Committee of the Republic of Uzbekistan.
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