The right decision of the President of Uzbekistan

Author: Yaroslav Romanchuk

A common criticism of libertarians is that instead of offering innovations, solutions and concrete projects, they direct all their efforts to discredit the government and the status quo. For supporters of freedom, it is of utmost importance that the world understands that this criticism is unfounded. And we can do this by promoting working libertarian solutions and striving to implement them in our country. Where to start? The countries of Eastern Europe and the CIS are a good start, since on the one hand they have more economic problems than Bulgaria, and on the other hand we have something to take from them in the form of ideas and solutions proposed by libertarian scientists and economists.

Shavkat Mirziyoyev, the President of Uzbekistan, is absolutely right. He exempted individual entrepreneurs in cities and villages with a population of less than 5,000 people from all taxes. Everyone in the field of tailoring services, shoemakers, hairdressers and those offering SPA services will work without taxes. This is true inclusive entrepreneurship. One of the values of individual entrepreneurs not being taxed is that they find jobs themselves and support themselves and their families.

In addition, they, with their own efforts, maintain the capitalization of their small family assets and resources. This way, these people develop a love and respect for entrepreneurship, cultivate qualities and create a good material basis for the development of a family business. A big plus is the fact that the state saves on tax administration, since millions of people support themselves independently, without assistance and subsidies. This is a saving of state funds and a powerful blow to corruption at the local level. And last but not least, this is a highly effective way to develop a small country, as well as to prevent emigration and the flight of people to big cities.

A very good step forward for Mr. Mirziyoyev, but too small and timid. Inclusive entrepreneurship is only 10-15% of everything that needs to be done to awaken a strong entrepreneurial spirit in Uzbekistan. Here are some logical ideas that guarantee high (6-9% per year), long-term (at least 20 years), inclusive (benefits the whole country, not just the nomenclature favorites) economic growth, within the framework of the inclusive entrepreneurship strategy:

• Cancellation of all taxes for individual entrepreneurs not for 5, but for 20 years. This is a generation. This way, people who have good ideas will have the opportunity to gather strength, energy, resources and incentive.
• Exempt all IPs in cities/villages with populations under 20,000 (instead of 5,000). This will dramatically expand the potential of entrepreneurship and increase the chances of monetizing human capital.
• Not just 4 areas of activity, but the most important thing – to free up all retail trade, all household services and catering. It is easier to enter this business, there are more prerequisites for realization, gaining experience and collecting start-up capital.
• All business activities, including those in manufacturing, should be exempt from taxes if their turnover does not exceed $3,000 per month.
• The land should be distributed to local residents (precise criteria for distribution and sale should be determined for all settlements, with the money going to the budget of the respective city). Thus, the land will become an object of full-fledged business relations. Introduction of a ban on the ownership of real estate or land by local authorities, with the exception of those who protect the life and personal property of the population.
• Abolition of all restrictions on foreign exchange regulation, as well as all requirements for availability and reporting.

Such a package of solutions is needed not only by Uzbekistan, but by all countries that were members of the former USSR. Shavkat Mirziyoyev sets a very good example. This is a very valuable initiative that can show people all over the world that even the authorities can understand and respect the powerful force of economic freedom. This is a prerequisite for effective fight against poverty, strengthening trust between society and the authorities, and a strong incentive for the development of the country.

Translation: Marina Zaharieva

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