Uzbekistan proposes raising public transport fares to reduce subsidy burden
Uzbekistan is considering a proposal to increase public transport fares to an "economically justified level" in an effort to lessen the financial strain of state subsidies. This initiative was put forth by the Institute of Fiscal Analysis, operating under the Ministry of Economy and Finance, during a recent policy discussion.
The institute stated that the primary goal of this move is to bolster the financial stability of the public transport network, which currently relies heavily on government funding. Data presented indicates that subsidies presently cover 65.1% of the operational expenses for public transport. This government support has seen a consistent rise, escalating from UZS 1 trillion (exceeding $83.2 million) in 2024 to UZS 1.2 trillion (approximately $1 billion) in 2025, and projected to reach UZS 1.385 trillion (over $115 million) by 2026.
The Institute of Fiscal Analysis estimates that an annual sum of approximately 1.9 trillion soums (more than $158 million) is needed to fund gross contracts for public transport services. Of this total, about 1.3 trillion soums (over $108 million) is specifically allocated to public transport within Tashkent.
Experts highlighted a concern that despite the increasing volume of subsidies, the efficiency of their expenditure and the overall performance of the transport system lack adequate transparent assessment.
To tackle these challenges, the institute put forward several recommendations. These include adjusting fares to an economically viable rate, streamlining routes with low passenger demand, expanding public transport services into regional areas, offering targeted assistance to citizens who qualify for social benefits, and tying payments to transport operators to specific key performance indicators (KPIs).
These proposals were presented as recommendations from the Institute of Fiscal Analysis, with the ultimate decision on their implementation resting with the appropriate government bodies.
In a related development in July, the institute also suggested a more extensive set of fiscal reforms. These reforms encompassed strategies to shrink the shadow economy, enhance tax and customs administration, and discontinue Uzbekistan's 1% tax cashback program.
The institute acknowledged that the cashback mechanism was effective in its initial phase, encouraging consumers to request fiscal receipts. However, experts contend that as the practice of requesting receipts has become more widespread, the necessity for broad monetary incentives has progressively diminished.