Uzbekistan has issued a presidential directive on steps to encourage textile, garment, and knitwear firms to deep process their products, make finished goods with high added value, and export those finished goods. A decree laid the groundwork for the creation of the Textile Industry Support Fund. The order stipulates that a number of actions must be carried out between February 1 of this year and January 1 of the following year, 2025.
Enterprises in the Republic of Karakalpakstan and its regions that have successfully implemented projects for the production of dyed fabric, mixed and dyed fabric products have been awarded a subsidy equal to ten percent of the cost of equipment purchased in accordance with these projects, up to a maximum of five hundred thousand dollars.
Companies that purchase machinery for the production of dyed fabric, mixed and dyed fabric products, and yarn containing more than 80 percent man-made fibers will be offered loans in a foreign currency to pay an initial payment of 15 percent for up to seven years, with a grace period of three years. These businesses will also be eligible for a three-year extension on their loan payments.
Companies that export colored fabric, dyed fabric and ready-made garments, and knitwear are eligible for loans in foreign currency of up to $3 million USD for a duration of up to one year, with a grace period of up to nine months. The term of the loan can range from one year to one year and nine months.
According to reports in Uzbek media, businesses that profit from the sale of dyed fabric, finished garments, and knitwear, including through the use of a commission agent, and whose share of the exports of these products is at least 80 percent are granted the right to pay a 1 percent social tax and debt repayment on property tax of legal entities for up to three years. This right is granted in exchange for the businesses’ ability to export at least 80 percent of these products.
According to the decree, the State Fund for the Support of Entrepreneurship’s terms for providing compensation and guarantees for loans received by exporters in commercial banks for pre-export financing must be extended until January 1, 2024, and this procedure must be extended to all exporting enterprises. In addition, the decree mandates that this procedure must be extended to all exporting enterprises.
Up until the first of July in 2022, the creation and implementation of the System for Mandatory Automated Accounting for Cotton Fibre will be guaranteed.
Reference:
“Uzbek Textile, Clothing, Knitwear Firms to Be Offered Subsidies, Loans.” Fibre2fashion.com, https://www.fibre2fashion.com/news/textile-news/uzbek-textile-clothing-knitwear-firms-to-be-offered-subsidies-loans-278617-newsdetails.htm
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