The essential content of the concept of tax burden in the

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THE ESSENTIAL CONTENT OF THE CONCEPT OF TAX BURDEN IN THE 
ECONOMY 
 
https://doi.org/10.5281/zenodo.8174687
 
 
Annotation
: 
This article examines issues such as the theory of 
taxation and the practical implications of the tax burden. It explores 
determining the most favorable levels of the tax burden and 
calculating it. 
Key words
: 
Tax, tax burden, levels of tax burden, calculation of 
tax burden, absolute tax burden, entrepreneur 
 
In both theory and practice of taxation, the problem of 
determining the most favorable tax burden has always existed. The 
level of tax revenues is influenced not only by socio-economic factors 
but also by the effective utilization of the tax system and its ability to 
fulfill its tasks. The impact of these functions can be assessed by 
examining the tax burden on economic entities. Ranking the 
economy based on the overall level of the tax burden is also 
increasingly important. 
Many economists have studied the level of the tax burden and its 
influence on economic development and the standard of living of the 
population through taxes. The use of reasonable, fair, and realistic 
options for the tax burden during a certain period ensures the efficient 
development of the economy in many developed countries. When 
managing the economy through taxes, particularly in achieving 
sectoral harmony, it is necessary to study the relevant tax burden 
situation in different sectors and industries. 
The tax burden on economic entities reflects the state's tax policy 
and provides a qualitative description of any tax system. Furthermore, 
the level of taxes is determined by both the efficiency of social 
production and the financial resources required by the state. 
Therefore, reducing the tax burden depends primarily on reducing 
state expenses and the level of payment for social services. 
Some experts associate the effectiveness of the tax system with 
the contribution of taxes to GDP, while others recommend calculating 
the tax burden by considering all payments, including allocations to 
extra-budgetary funds and the volume of product sales. 

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Describing the distribution of the tax burden among members of 
society, it can be said that most production taxes, especially indirect 
taxes, are included in the cost of goods and ultimately borne by the 
consumer. The tax burden on the population, or the tax potential per 
capita, can be determined in relation to the average per capita 
income. 
Based on this, when calculating the tax potential of the entire 
country, the tax burden is calculated as the sum of all tax amounts 
and insurance contributions. When calculating the tax burden related 
to the labor of hired employees, all taxes are added together, and the 
weight of the tax burden is proposed to be determined by the share 
of the value weight and adjusted (increased) by the tax burden 
coefficient of the population. 
The aforementioned methodology for calculating the tax burden 
as a tax share in GDP is simple and widely used in foreign countries. 
However, currently, this methodology does not allow for comparing 
the level of tax burden at the micro level for enterprises in different 
production branches and sectors of the economy. 
The Ministry of Finance of the Republic of Uzbekistan and the State 
Tax Committee have recommended a methodology for calculating 
the tax burden on legal entities. In this methodology, the tax burden is 
determined by a ratio that includes all calculated taxes, fees, and 
other mandatory payments, the calculated amount of payments to 
extra-budgetary funds, the volume of product sales, and income from 
other sales. 
An increase in wage expenses affects the increase in payments 
to extra-budgetary funds. Additionally, fines paid as a result of late tax 
payments can also contribute to an increase in the tax burden. 
When determining the tax burden, it is necessary to distinguish 
between absolute and relative tax burden. The absolute tax burden 
represents the total amount of taxes, fees, and other mandatory 
payments transferred to budgetary and extra-budgetary funds, 
indicating the total tax liabilities of economic entities. In statistical 
reports, this indicator includes the actual transfer of tax payments to 
the budget and mandatory insurance contributions to extra-
budgetary funds, as well as monitoring these payments. 
Insurance contributions paid by business entities to extra-
budgetary funds are compulsory payments with a tax character, and 
they should be taken into account when calculating the tax burden. 

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However, the absolute tax burden does not represent a conflict 
of tax obligations. This indicator does not reflect the compatibility of 
the sources of payment with the number of taxpayers. Therefore, it is 
more appropriate to use the relative tax burden indicator. 
The relative tax burden is understood as the ratio of its absolute 
amount to the newly created value, which includes the contribution 
of taxes, fees, and other mandatory payments, as well as its 
dependence on the newly created value. 
The source of tax payments is the value added. Value added 
refers to the value of goods and services, reduced by intermediate 
consumption, which is viewed as consumption from the perspective 
of further production. Different methods of tax collection aim to obtain 
a portion of the added value. 
Thus, the impact of the tax burden on business activity is 
undeniable. Its effect can be either negative or positive. When the tax 
burden is heavy, business activity slows down and may even come to 
a halt. On the other hand, a relatively lighter tax burden stimulates 
business activity. However, it is not appropriate to interpret a reduction 
in the tax burden as the sole reason for the development of 
entrepreneurship. Additionally, reducing the tax burden has its logical 
limit, which is largely associated with the expenses to be covered by 
the state budget. Therefore, in our view, in order to further stimulate 
business activities in Uzbekistan, it is necessary to consider the 
redistribution of the tax burden among different sectors of the 
economy as an urgent issue, rather than further easing the tax burden.