TAX POLICY, INFORMAL ECONOMY AND DEVELOPMENT OF SMALL AND MEDIUM-SIZED ENTERPRISES: A COMPARATIVE ANALYSIS OF DEVELOPING COUNTRIES WITH A FOCUS ON UZBEKISTAN

Abstract

This article examines the impact of tax policy on the development and formalization of small and medium-sized enterprises (SMEs) in developing countries. Based on international empirical studies and taking into account tax system reforms in Uzbekistan, the interrelationship between tax burden, administrative costs, value-added tax structure, tax incentives, the level of the informal economy, and the quality of public services is analyzed. The study employs the resource-based approach, public choice theory, and fiscal exchange theory. It is demonstrated that excessive tax burden and administrative complexity reduce SME efficiency, whereas digitalization and improvements in the quality of public services contribute to their formalization and growth.