Textile enterprises to be provided with subsidies up to $500,000  

The presidential decree “On measures to encourage deep processing and production of high value-added finished products and their export at textile and garment enterprises” was adopted.

A textile support fund has been established. From February 1, 2022 to January 1, 2025:

•  Enterprises implementing projects for the production of mixed and dyed fabrics in the Republic of Karakalpakstan and the regions will receive a subsidy of 10% of the cost of equipment purchased under the projects, but not more than the equivalent of $500,000;
•  Enterprises purchasing mixed and dyed fabrics, as well as equipment for the production of yarn with a fiber content of more than 80% will be provided with a loan in foreign currency for a period of 3 years with a grace period of 7 years to pay the initial payment of 15%;
•  enterprises exporting dyed fabrics and finished garments will be provided with loans in foreign currency for up to $3 million with a grace period of up to 9 months for a period of 1 year;

Enterprises that have exported at least 80% of the total proceeds from the sale of dyed fabrics and finished garments, including through the commissioner (trustee):

•  will be given the right to pay social tax at the rate of 1%; the right to defer payment of property tax from legal entities for a period of up to 3 years without notifying the tax authorities and without submitting an application to the local state authorities. In this case, after the expiration of the tax deferral period, the tax debt and accrued interest will be paid in installments over a period equal to the deferral period.

From February 1, 2022 to January 1, 2025, the funds from the following sources will be directed to the Fund: 25% of the fee for the export of cotton yarn and 100% of the fee for the export of knitted fabrics; 70% of the fee levied for the export of cotton yarn.

According to the decree, the terms of compensation and guarantees by the State Fund for Entrepreneurship Support on loans received by exporters for pre-export financing have been extended until January 1, 2024, and this procedure will be applied to all exporting enterprises.

By July 1, 2022, a system of mandatory automated accounting of cotton fiber will be launched.