It is expected that the Cabinet of Ministers of Uzbekistan will approve new prices for raw cotton in 2019 in connection with the introduction of value added tax in agriculture, Kun.uz correspondent reports.
According to the draft presidential decree “On measures to further regulate the provision of tax and customs privileges”, it is envisaged that the producers of raw cotton will be required to pay value added tax starting from the 2019 harvest term.
At the same time, they will be given the right to consider the value added tax paid for growing cotton fiber in 2019 and procured goods (works, services) after October 1, 2018.
The decree has now been publicized. If it is adopted without further addenda, the government will have to set a new price for cotton purchase.
The share of cotton fiber in the total volume of exports in 2018 (1.6%) declined considerably compared to the same period last year. Raw materials were mainly sent for domestic production and cotton fields were reduced.
In addition, the government sharply increased the cost of cotton to fight forced labor at the fields.