DIFFERENTIATED APPROACHES TO INCENTIVIZING THE TRANSITION OF SMALL BUSINESSES TO THE FORMAL ECONOMY
DOI:
https://doi.org/10.5281/zenodo.23357708Abstract
The article examines the limitations of a uniform incentive package for integrating small businesses into the formal economy and the need for differentiated policies tailored to business profiles. It distinguishes formalization barriers faced by unregistered microbusinesses, registered businesses with insufficiently established recordkeeping practices, small enterprises with growth potential, and entities with identified legal compliance risks. A comparative analysis of international experience and Uzbekistan’s current institutional conditions serves as the basis for developing four profiles, corresponding targeted incentive packages, and a twelve-month monitoring algorithm. Under the proposed approach, program effectiveness is assessed through the continuity of formal operations, documented turnover, formalized employment relationships, and public expenditure per additional business that remains formally operational, rather than through one-time registration.Keywords
small business, formal economy, differentiated incentives, informal activity, business profile, targeted support, compliance costs, financial inclusion, behavior, monitoringReferences
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