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21:35 / 31.05.2019 170

Sewing complexes to be established in all regions of Uzbekistan

In Uzbekistan, by the end of 2021, it is planned to create 271 textile enterprises and provide 80,880 people with jobs. The President approved the corresponding program by a decree on measures to organize the production of garment and knitwear products and provide employment in the regions.

JSC Uzpakhtasanoat and its member enterprises will create complexes of light construction materials on the basis of vacant buildings and structures.

These complexes will be transferred to member-enterprises of the Uztukimachiliksanoat association or other manufacturers of garments and knitwear for a period of five years at a rate of no more than 10% on a leasing basis or on lease with a buy-out condition.

Complexes will be created in all areas. Thus, 30 projects will be launched in Karakalpakstan, 32 – in the Syrdarya region, 30 – in the Tashkent region, 28 – in the Samarkand region, 26 – in each of the Kashkadarya and Surkhandarya regions, 24 – in the Jizzakh region, 20 – in the Khorezm region, 15 – in Fergana region, 14 – in each of the Andijan and Navoi regions, 12 – in the Namangan region.

The projects will be financed:

•  366 billion soums at the expense of credit lines of the Fund for Reconstruction and Development, opened in commercial banks in accordance with the presidential decree;

•  50 billion soums by opening credit lines of the State Employment Promotion Foundation under the Ministry of Employment and Labor Relations in commercial banks at an interest rate of 6% for a period of five years with a grace period of two years, including 2% margin of a commercial bank.

The associations of banks, together with commercial banks, have been instructed to expand short-term lending to provide working capital for the complexes. Interest on loans from commercial banks is covered by the State Foundation for supporting the development of business activities under the Cabinet of Ministers:

•  on loans for replenishment of working capital – in the amount of 25% of the interest rate of the bank (but not more than 5 percentage points);

•  on loans for the purchase of equipment – in the amount of 50% of the bank interest rate.

Until January 1, 2022, as part of the implementation of projects, JSC “Uzpakhtasanoat” and its member companies are exempt from:

•  payment of income tax and property tax until the day of transfer of the complexes to business entities;

•  customs payments (with the exception of fees for customs clearance) for the import of technological equipment, components, construction materials not produced in Uzbekistan, according to the lists formed in the prescribed manner.

The customs privileges, provided for by the presidential decree of December 14, 2017, will be extended to the complexes. 

When implementing the complexes on a leasing basis, the value-added tax is calculated on the basis of the positive difference formed between their book value and the cost of sale.

At the same time, with intersystem sales, the raw materials produced (with the exception of cotton fiber) and semi-finished products are not considered as objects of taxation.

As part of the implementation of projects, sewing and knitwear enterprises as part of the JSC Uzpakhtasanoat will be allowed, as an exception:

•  to enter into direct contracts for the design and construction and installation work, as well as for the purchase of equipment;

•  to purchase cotton fiber at exchange trading for the purpose of further transfer to textile mills for processing with the condition of return in the form of semi-finished products.

Standard projects of the complexes should be developed and approved within a month. It is noted that the complexes should be built from low-cost domestic materials based on innovative technologies. Monitoring the observance of town planning norms is entrusted to the Ministry of Construction.

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