Uzbekistan cuts social tax for textile companies to 1%

On September 19, President Shavkat Mirziyoyev signed a resolution to strengthen the sector’s export potential, the Ministry of Justice reported.

According to the document, the target for 2026 is to increase textile and knitwear output by 9 percent to UZS 146 trillion. Exports are expected to reach $3.3 billion, compared with just over $1 billion in the first eight months of 2025 – down by a quarter year-on-year.

Farmers will receive subsidies of UZS 1 million for every ton of raw cotton harvested and sold on time, including through exchange trading. Companies that cultivate or purchase raw cotton at their own expense will be reimbursed for 10 percent of their costs.

Textile clusters will be granted relief on loans taken from banks to finance the 2022–2023 cotton harvest, which were secured against property. All penalties accrued on unpaid interest as of August 1 will be written off.

To facilitate faster repayment, clusters will be allowed to first repay the principal debt, with interest to be paid in equal installments over the course of a year. Enterprises that settle their debts and interest on schedule will receive compensation for 50 percent of their interest payments.

The social tax rate for textile companies and clusters has been reduced to 1 percent for three years starting September 1. Imports of blended fabrics, as well as materials for the leather and sericulture industries, will be exempt from customs duties for the same period.

In addition, textile clusters and large enterprises employing more than 200 people will be encouraged to establish kindergartens. These facilities will receive the same subsidies as other private preschool institutions.

The president first announced the cancellation of UZS 377 billion in penalties for cluster debts on cotton at a meeting in August. At that time, he noted that the new repayment scheme would allow clusters to save UZS 800 billion in working capital.