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THE IMPACT OF TAX INCENTIVES ON THE REGULATION OF TAX
RELATIONS
Nodirbek Khasatullaev
–
student, Samarkand branch of Tashkent state university
of Economics, Samarkand, Uzbekistan
Zarif Ahrorov
–
DSc, Associate Professor, Samarkand branch of Tashkent state
university of Economics, Samarkand, Uzbekistan
Abstract:
the article describes the essence of tax benefits, the organization of
tax services in providing them, the priority areas of tax services. Proposals and
recommendations for improvement in the direction of modernization of production
of tax benefits, technical renewal and diversification, wide introduction of
innovative technologies have been developed.
Key words:
tax, tax policy, tax credit, tax service, tax base, investment tax
credit.
Introduction
Currently, the further liberalization of the tax policy and the reduction of the
tax burden are mainly reflected in the improvement of tax administration by
reducing taxes on the income of economic entities, identifying inefficient types of
taxes, systematically abolishing them, and simplifying taxes with the same tax
base. In general, the occurrence of major changes in the structure of the tax policy
in this regard is ensured by the provision of consistent tax benefits. The main idea
of the new tax concept, which will be introduced starting from 2019, is to reduce
the tax burden and apply a simple and stable tax system. In this way, it is possible
to increase the competitiveness of our economy, create an all-round favorable
environment for entrepreneurs and investors [1].
Decreasing the tax burden has a positive effect on increasing the real income
of economic entities, expanding their production potential and encouraging them.
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Main part
It should be said that until now in the economic literature, words or ideas such
as "current tax incentives", "introduction of tax incentives", "creating opportunities
to use tax incentives", "optimization of tax incentives", "cancellation of inefficient
tax incentives" are encountered [2 -6]. Each of them is covered in its own way
without controversy. The existence of such cases seems to exclude the role of the
state in the use of tax incentives. In practice, the role of the state in this regard is
huge.
The role of the state in the application of tax benefits is primarily manifested
in services related to the provision of tax benefits. Thus, the essence of the above-
mentioned words is reflected in "services for providing tax benefits". The delivery
service is carried out by state bodies.
Based on the above, there is a need to focus on tax benefits and the cases of
their provision by the state.
Nowadays, it is important to consider the improvement of the quality of
services provided for the provision of tax benefits as a reliable way to ensure the
wide introduction of innovative technologies and to reach new heights in this
regard. In other words, the provision of tax benefits should serve the purposes of
modernization of production, technical renewal and diversification, as well as wide
introduction of innovative technologies, based on the requirements of the day.
It is necessary to carry out such a task not only without R&D, but also to
provide priority and stable state support for innovation in our country. It is
undoubtedly important to support them based on financial and economic methods,
that is, through taxation and tax incentives. World practice shows that
modernization of production, technical renewal and diversification should be
carried out with the help of direct and indirect means of providing services for the
wide introduction of innovative technologies by the state. If the above processes
are carried out by allocating resources through the financing of relevant
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organizations and programs, this represents the provision of direct (indirect)
incentive services. They include direct budget financing and the provision of
services related to the provision of budget subsidies.
Tax services provided for indirect (indirect) stimulation of production
modernization, technical renewal and diversification, wide introduction of
innovative technologies in enterprises are mainly implemented through tax credits
(Fig. 1).
Fig 1. Services provided through tax incentives provided to businesses
It is necessary to take into account the following when determining the
mechanisms for providing concrete types of tax incentives for the promotion of
enterprise activity through taxes:
—
specific types of R&D services that give the right to receive tax benefits
and the minimum amount of expenses incurred for them;
—
the size of the enterprise, region, sector, type of production, production
technology, level of tax credit interest rate, upper limit of tax benefits (interest rate
Areas of services provided through tax incentives provided to enterprises
investment deductions
accelerated depreciation
total or partial exclusion of current expenses of R&D from taxable income
Providing a tax credit for the increased portion of R&D expenses
deductions for profit tax
giving tax breaks to small businesses, etc
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level or absolute size).
In our country, the following tax benefits have been provided by the state
for taxation of enterprises operating in the field of R&D.
Depending on the activity of enterprises, tax incentives have been showing
their positive effect on the development of science to a certain extent. However, in
the current conditions, they cannot be considered sufficient. Based on the above
considerations, it is appropriate to implement the following:
1. Taking into account the level of innovative activity, it is necessary to
provide incentives for indirect (indirect) stimulation of R&D by reducing the tax
payment on profits. The higher the level of innovative activity, the more tax
benefits should be provided to the relevant enterprises. There should be a stable
demand for the products produced by these enterprises, and the results of R&D
should be worthy of providing tax benefits by the state.
2. When calculating the amount of the tax base, the state should legally and
practically (in reality) provide tax relief services for the accelerated depreciation
that can be used for the transfer of the R&D. It is worth mentioning that the
provision of tax benefits for investments, in most cases in the form of investment
tax deductions (investment tax credit), can be of particular importance. Such
deduction is excluded from the amount of calculated profit tax. Such a form of
providing tax incentives in enterprises creates services related to the provision of
incentives for the expansion of capital investments at the expense of own funds for
computing techniques, scientific equipment, new machines and equipment.
Therefore, it is important that tax authorities provide consulting services on
classification of the level (scope, size) of deductions, taking into account the types
of equipment and their service life. In this case, granting the right to receive a
discount on new equipment not for the year of purchase, but for the year of their
introduction into production creates opportunities to encourage the faster adoption
of the above.
It is necessary to ensure that the investment tax deduction becomes one of
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the main channels of state subsidization of enterprises (organizations and
institutions) implementing R&D in our country. In particular, the implementation
of such a procedure for the purpose of saving energy resources has a unique
meaning of providing a service. Because modernization of the economy,
strengthening of competitiveness, improvement of the population's well-being is
largely related to the efficient use of available resources, that is, electricity and
energy resources. Therefore, it is necessary to provide incentives for the use of
alternative types of energy, the use of new technologies in the energy sector. It may
also be beneficial to provide services for setting the levels of such discounts based
on the location of organizations.
3. It is also necessary to encourage enterprises carrying out technical
rearmament of production to be equipped with equipment and machinery by
providing tax incentives. Such economic entities should be given the right to
choose one of the following tax relief services: using the accelerated depreciation
method or providing the opportunity to use investment deductions. In the current
conditions, it is also appropriate to give such enterprises (organizations) the right
to reduce the amount of tax payable in the amount of a certain percentage from the
total value of modern equipment and machines purchased this year.
4. It should be said that it is appropriate to consider the possibility of
introducing mechanisms for providing special incentive tax deductions. When
determining such a deduction, it is important to pay attention to the following: first,
to determine the part of the additional expenses spent by the enterprise on R&D in
the current year, which has increased from the level of the previous year or the
current year, and then to determine a certain part of this increased amount and to
deduct it from the total amount of tax on the profit of the enterprise, and to calculate
such a deduction the amount (amount) may change under the influence of certain
factors.
The discount in the form of a tax credit, provided in the above proposed
manner, depending on the increased volume of R&D, is considered effective for
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the state budget compared to other forms of scientific research promotion. In
practice, this procedure does not lead to a decrease in tax revenues on budget
income. Therefore, it is possible to provide additional tax benefits to such
enterprises (organizations) that are spending additional funds and have not
previously used the loan provided for research.
5. It is necessary to provide incentives to stimulate the funding of research
in research institutes and higher education institutions. In order to achieve this, to
provide incentives for the application of a discount on the tax on the profits of
economic entities that have concluded an agreement with such performers on the
implementation of R&D. If such entities provide grants for scientific equipment to
scientific research institutes and higher educational institutions, it is important to
expand the range of tax benefits that should be given to them.
6. In order to encourage venture companies [7] that carry out research and
development activities, it is necessary to provide them with incentives to reduce
the tax rate on the increased part of the capital. The provision of such benefits in
relation to the incomes received by the enterprises may bear fruit in the future.
7. When stimulating the science sector by providing tax incentives, it is
necessary to pay special attention to the following:
a) It is important to provide services to ensure financing of science from
various sources, including budget funds, and the contribution of financing services
based on business contracts should be high;
b) Despite the fact that financing at the expense of innovative processes is
of crucial importance, the funds spent for this purpose make up only 0.5-0.7% of
the state budget expenses in the Russian Federation - 5.5 thousand US dollars, in
the USA - 189 4 thousand dollars, in Japan - 148.5 thousand US dollars, in Great
Britain - 150.6 thousand US dollars, in Germany - 154.8 thousand US dollars and
in France - 177.1 thousand US dollars [8].
It is worth saying that in the current conditions, it is considered an important
factor that restores and ensures the development of the science industry, therefore,
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the transition to the principle of equal distribution in relation to it today will lead
to the closure of many promising scientific directions, as a result of which the
important directions and branches of the development of science will be weakened
and the provision of financial services will become necessary. .
8. In practice, the improvement of the provision of tax benefits services in
the direction of stimulating the development of the innovative sector should be
considered as an important direction of their optimization. It should be noted that,
taking into account that innovative processes are associated with high level of
uncertainty, it is important to improve the R&D incentive system by providing tax
benefits in specific directions.
Conclusion
Considering that modernization of production of tax benefits, technical
renewal and diversification, improvement in the direction of wide introduction of
innovative technologies is the main modern direction of their optimization, the
scientific proposal and practical recommendations developed above in this regard
are technical and technological renewal of production in order to ensure
competitiveness in our country. Searching for large and small projects, finding the
necessary funds and sources for this is of urgent importance. Therefore, the
improvement of the state regulation of the provision of tax benefits services in this
direction should be recognized as one of the important measures in determining the
main directions of the socio-economic development strategy facing the countries
of the world, including our country.
First, enterprises (organizations) use measures aimed at increasing the
volume of self-financing and increasing incentives for innovation and investment
(in particular, reducing tax amounts, introducing tax deductions, applying
depreciation benefits, etc.);
Second, facilitating the provision of external sources of financing for
economic entities. This includes state guarantees, credit insurance, preferential
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subsidization, etc. ensure state support for the provision of services;
Thirdly, to introduce methods of using new financial instruments and
increase the role of the state in this regard;
Fourthly, to promote the use of non-traditional sources of financing, as well
as the funds of private individuals, and to ensure that risks in such processes are
protected by the state;
Fifth, attracting preferential foreign capital, etc.
Currently, the changes introduced to the Tax Code will ensure the stable and
balanced development of our country's economy, further improvement of the
standard of living and well-being, and further improvement of the services
provided by state bodies within the framework of tax incentives for various
innovative economic entities.
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