EFFECTIVE INSTRUMENTS OF LABOR INCOME TAXATION IN REDUCING POVERTY AND INEQUALITY: THE CASE OF UZBEKISTAN

Аннотация

Labor income taxation is a critical policy instrument for promoting inclusive growth, reducing poverty, and narrowing income inequality. In Uzbekistan, where economic reforms have been accelerating since 2017, personal income tax policies are increasingly being used to address socioeconomic disparities. This paper examines the effectiveness of key labor income tax instruments—such as progressive tax brackets, personal allowances, and social contributions—in reducing poverty and inequality. It draws on national data, international experiences, and recent tax policy changes in Uzbekistan. The findings suggest that while progress has been made, the redistributive potential of labor taxation remains underutilized due to high informality, regressive social payments, and limited targeted support for low-income workers. Keywords: labor income taxation, poverty reduction, inequality, progressive taxation, tax policy, social contributions, informal employment, Uzbekistan, redistributive instruments, inclusive growth.