Uzbekistan’s fight against shadow economy yields 16 trillion UZS in 2024

In 2024, the Prosecutor General’s Office brought nearly 16 trillion UZS out of the shadow economy and into the state budget, according to the agency’s press service.

On March 20, an expanded meeting of the Special Commission on Reducing the Shadow Economy was held, chaired by Deputy Prime Minister and Minister of Economy and Finance Jamshid Kuchkarov, alongside Prosecutor General Nigmatulla Yuldashev. The meeting highlighted that last year, targeted efforts were made to secure additional budget revenue by curbing shadow transactions and tapping unused reserves.

As a result, more than 747,000 unreported transactions were identified, leading to an additional 15.9 trillion UZS being funneled into the budget. Furthermore, over 15,000 informal jobs at entrepreneurial entities were legalized, and 9,000 entrepreneurs previously operating in the shadows were brought into the formal sector.

However, analysis shows that the situation regarding the reduction of the shadow economy has not seen significant improvement, with insufficient execution of assigned tasks by responsible parties hindering progress.

In criminal cases tied to shadow economic activities, damages amounting to nearly 2 trillion UZS were recovered.

The Special Commission issued directives to enhance tax and customs administration, reduce the tax burden, create a level playing field by eliminating bureaucratic obstacles to business, and shrink the shadow economy while boosting budget revenues through economic digitization. Additional instructions were given to reduce shadow transactions and eradicate corruption in key sectors such as pharmaceuticals, transport, construction, geology, agriculture, tourism, and employment.

The shadow economy

In September 2023, experts estimated the shadow economy at $32 billion (approximately 40% of GDP), driven primarily by the secondary housing and automotive markets, agriculture, informal trade, and services.

In July 2024, the Prosecutor General’s Office launched a Telegram bot to combat the shadow economy, enabling citizens to submit both complaints about violations and suggestions for solutions.

According to the Statistics Agency, the "hidden" economy in 2023 approached 100 trillion UZS, with 80% concentrated in the service sector.

In October of the previous year, Deputy Prosecutor General and Head of the Department for Combating Economic Crimes Shamsiddin Sokhibnazarov reported that nearly 10 trillion UZS had been brought out of the shadows since the start of the year.

In December, Deputy Chairman of the Tax Committee Mubin Mirzaev announced plans to halve Uzbekistan’s shadow economy by 2030. In 2025, formalizing the economy is expected to add 20 trillion UZS to the state budget.

In 2024, Uzbekistan’s unobserved economy exceeded 505 trillion UZS, or $40 billion (34.8% of GDP). The informal economy accounted for 383.64 trillion UZS (26.4%), while the shadow economy comprised 122 trillion UZS (8.4%).