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Measures have been taken to support the textile industry

On January 21, President Shavkat Mirziyoyev signed a decree to support the textile and knitwear industries. The document was published by UzA.

According to the decree, measures are being introduced to stimulate production in Uzbekistan, as well as the export of finished garments and textile products. To ensure that these measures are realized, the Textile Industry Support Fund (Fund) will be created at the Ministry of Investment and Foreign Trade.

So, from February 1, 2022, to January 1, 2025, textile and knitwear enterprises – exporters (earning at least 80% of revenue from foreign supplies) receive tax benefits:

  • social tax rate – 1% ;
  • deferral of property tax debt repayment – up to 3 years, with subsequent payment in installments.

A business that implements projects for the production of dyed fabric, blended and dyed fabric can receive subsidies from the Fund for the purchase of equipment for them.

The amount of payment will be 10% of the cost of equipment, a maximum – $500,000. Subsidies are allocated only for the purchase of new equipment within the framework of projects, excluding delivery and other additional costs.

To pay subsidies, the Fund will receive $25 million from the Fund for Reconstruction and Development of Uzbekistan. In addition, the Fund will receive part of the export fees from yarn and knitted fabrics.

Buyers of looms will be able to receive foreign currency loans from the National Bank for up to 7 years, including 3 grace years. The loan will cover the first installment of 15% of their value.

Also, the National Bank will allocate foreign currency loans to exporters of fabrics and ready-made clothes to replenish working capital. The term of loans will be up to 1 year (including preferential 9 months), the maximum amount is $3 million.

For these purposes, the Ministry of Finance will allocate up to $100 million received through the issuance of international bonds (Eurobonds). The rate on loans will be determined based on the yield percentage of Eurobonds in the secondary market.

In addition, it was instructed to extend until January 1, 2024, the provision of compensation and guarantees for loans issued to exporters in banks by the Entrepreneurship Support Fund.