The article examines the interrelationship and mechanisms of influence between tax policy and the develop-ment of entrepreneurship, analyzing their role in economic processes and the directions of their interaction. The main objectives of tax policy, the factors affecting the entrepreneurial environment, as well as the current situation and reforms in this field in Azerbaijan are explored. The research findings indicate that an effective tax policy stimulates the development of entrepreneurship, increases economic activity, and contributes to the reduction of the informal economy. Additionally, practical recommendations are presented for the develop-ment of entrepreneurship and the improvement of tax policy.