Tax benefits for young people: state support for the self-employed and vocational trainees until 2028

As part of the policy of stimulating youth employment and entrepreneurship development, Uzbekistan is introducing a number of tax incentives aimed at supporting young citizens under the age of 30. The amendments set out in Article 483 of the Tax Code form a system of targeted fiscal eases that cover both start-up entrepreneurs and students in the framework of professional training.

Zero rate for outbound trading

The first direction concerns young citizens who have organized outbound trade along highways. According to the amendments, such entrepreneurs are exempt from paying taxes on income received during the first six months of their activity. The measure applies to those who registered outbound trading before January 1, 2028.

Providing tax breaks at the initial stage is aimed at reducing the administrative burden and creating conditions for a sustainable business launch. The format of outbound trading, as a rule, does not require large investments, but is subject to high market risks. The benefit compensates for some of these risks and can contribute to the formation of a layer of sustainable small entrepreneurs among young people.

Promotion of vocational training for schoolchildren and students

The second block of benefits is aimed at integrating young students into the economy through the vocational training system. Students of schools, colleges and technical schools undergoing vocational training will be subject to income tax at a preferential rate of 1% of the income received. This applies to labor income paid by business entities participating in the practical training program.

Reducing the tax burden allows students to legally receive labor remuneration with minimal costs and contributes to the formation of labor skills in the real production process. The 1% tax rate also reduces the barrier to entry into first official employment, ensuring transparency of payment schemes.

Employers ' motivation: reduced social tax

An additional benefit applies to entrepreneurs who have accepted students for vocational training. For income paid as wages to students under the age of 30, the employer's social tax rate will be only 1%. The benefit will be valid from September 1, 2024 to September 1, 2027.

The reduced tax burden is intended to encourage the business sector to participate in the dual education system. Instead of isolated training in educational institutions, young people will have the opportunity to learn skills in a production environment, and businesses will be able to invest in potential future employees with minimal costs at the initial stage.

General context

The introduction of these fiscal measures reflects the state's desire to adapt the tax system to the challenges of socio-economic development. Young people are considered as one of the key drivers of the economy, and reducing tax pressure in the initial period of activity or when receiving the first income becomes an instrument of social and economic policy.

A special feature of the new rules is their focus on the real sector and a flexible combination of the interests of the state, business and the youth themselves. At the same time, there is still a time limit — all measures are valid until 2027-2028, which allows us to evaluate their effectiveness and, if necessary, adjust them in the future.

With the ongoing transformation of the labor market and the expansion of the self-employment sector, such benefits can be an important element in creating a sustainable model for youth inclusion in economic activity.