Every person, regardless of where they work, desires to earn an honest living and retire with respect and dignity. Receiving a pension from the state as a reward for one’s labor and enjoying old age is a dream shared by many. However, nowadays some citizens work without an official employment contract and receive wages “in envelopes,” without guaranteed protection of their labor rights. Such workers do not have contributions made to their individual pension accounts by their employers, which leads to difficulties when reaching retirement age.

The backbone of the national economy is entrepreneurship. Behind every job created, every product manufactured and exported, stands an entrepreneur’s courage, hard work, and initiative. Indeed, in recent years, the country has undergone wide-ranging reforms, especially focused on easing the tax burden, making it simpler and more transparent, and encouraging businesses to move out of the shadows.

— Starting from 2026, entrepreneurs with an annual turnover of up to 1 billion UZS will be allowed to pay taxes at a reduced rate of just 1%. This is a significant relief for thousands of small business owners. It will allow them to reinvest the retained funds to expand their operations and create new jobs, — says Murodbek Karimov, a specialist at the Khorezm Regional Tax Department.

— Of course, to eliminate informal labor and detect and prevent under-the-table wage payments, tax officials are actively conducting public awareness campaigns under slogans such as “Your employment contract is your social protection” and “Your future is in your own hands.” As a result of these efforts, 17,923 employees have been brought under formal social protection. Notably:

2,032 workers were formalized in trade and food service establishments,

10,688 in production and service enterprises,

475 in construction companies, and

4,728 in the agriculture sector.

Cases of concealing employee numbers and misreporting income have been identified and rectified in these sectors, resulting in 7.5 billion UZS being added to the state budget.

During these campaigns, detailed information is also provided about how hiding employees or wages in tax reports is considered tax base evasion, which may lead to financial penalties.

According to Article 223 of the Tax Code, if an employer fails to report the actual wages of employees or fails to declare the existence of employed individuals, it is classified as hiding the tax base.
As per Article 175-5 of the Code of Administrative Responsibility of the Republic of Uzbekistan, hiding the number of employees can result in a fine of 10 times the base calculation amount.
If the same violation is committed again within one year after administrative penalties have already been applied, the fine increases to 20 times the base calculation amount.

It must be understood that if you are working without a legal employment contract — receiving your salary in cash or “off the books” — your employer is likely avoiding paying income tax on your behalf. Your employment will not count towards your official work history, and as a result, you will not receive a full pension, nor will social contributions or insurance benefits be available to you.

If you suffer physical or emotional harm while working, no one is legally obligated to compensate you, because you are not officially registered as a worker.

By choosing to work officially — whether in the public or private sector — you are not only protecting your own future, but also contributing to the development of the entire society and country.
The path you choose benefits all of us.

Roman Atajanov
Head of the Public Relations Department
Khorezm Regional Tax Department