PRESIDENTIAL DECREE OF THE REPUBLIC OF UZBEKISTAN

of January 21, 2022 No. UP-53

About measures for stimulation of deep conversion, production and export of finished goods with high value added the textile and sewing and knitted companies

For the purpose of implementation of mechanisms of further stimulation of deep conversion, production and export of finished goods with high value added the textile and sewing and knitted companies with effective use of the available source of raw materials in the republic:

1. Create Fund of support of textile industry (further - Fund) under the Agency of promotion of export under the Ministry of investments and foreign trade (further - the Agency) without formation of legal entity and to determine sources of forming of its income:

the funds allocated from Fund of reconstruction and development;

the charges levied when exporting cotton yarn and knitted cloth through customs border of the Republic of Uzbekistan, in the amount of, established by acts of the legislation;

charitable means of physical persons and legal entities, grants of the international financial institutions and foreign organizations;

other sources which are not prohibited by acts of the legislation.

2. Establish for the period from February 1, 2022 to January 1, 2025 procedure according to which:

a) subsidies in the amount of 10 percent of cost of the equipment which was purchased within project data, but 500 thousand US dollars which are not exceeding in equivalent at the expense of Fund are allocated to the companies which realized projects of production of colored cloth, mixed and colored fabric products in the Republic of Karakalpakstan and areas. At the same time it is necessary:

acquire the new equipment within the above-stated projects;

not include in equipment cost expenses on delivery and other additional services;

have the act of input of the project in operation;

b) to the companies buying the equipment on production of colored cloth, mixed and colored fabric products, and also yarn as a part of which artificial fibers occupy more than 80 percent of JSC National Bank of Foreign Economic Activity of the Republic of Uzbekistan foreign currency loans for payment of 15 percent initial payment for a period of up to 7 years, including grace period 3 years, at the deposit rate established according to the paragraph the fourth item 4 of this Decree with addition of margin of bank in the amount of 1 percent are allocated;

c) to the companies exporting colored cloth, colored fabric and finished sewing and knitted goods, JSC National Bank of Foreign Economic Activity of the Republic of Uzbekistan allocates foreign currency loans in the amount of, not exceeding 3 million US dollars, on preexport financing, including replenishment of current assets, for a period of up to 1 year, including grace period up to 9 months, at the deposit rate established according to the paragraph the fourth item 4 of this Decree with addition of margin of bank in the amount of 1 percent;

payment of the social tax on the tax rate in the amount of 1 percent;

deferred settlement of debt on the property tax of legal entities for up to three years with the notification of tax authorities without the direction of the statement in public authorities on places. At the same time after delay term on this tax the tax debt and the added percent are paid by installments during the term equal to delay term.

To the Cabinet of Ministers in two weeks to introduce in Legislative house of Oliy Majlis of the Republic of Uzbekistan the bill on the changes and amendments in the Tax code of the Republic of Uzbekistan following from paragraph two of the subitem "g" of this Item.

3. Determine that the means arriving from following sources during the period from March 1, 2022 to January 1, 2025 go to Fund:

a) 20 percent of the charges levied for export of cotton yarn and 100 percent of the charges levied for export of knitted cloth. At the same time these funds are allocated for subsidizing of part of cost of the equipment which was purchased within projects of production of colored cloth, mixed and colored fabric products;

b) 70 percent of charges (40 percent of the charges levied during the period from November 1, 2023 to December 31, 2024) levied for export of cotton yarn. At the same time these funds are allocated for subsidizing of the companies exporting finished sewing and knitted goods (the Commodity Nomenclature of Foreign Economic Activity code 61 - 63). These subsidies are allocated to the export companies monthly to the 20th day of the next month with equal shares in proportion to the amount of export of finished sewing and knitted goods at the expense of the means which arrived in month under report.

4. To fund of reconstruction and development in requests of the Agency to allocate to Fund funds in the amount of 25 million US dollars on a grant basis for subsidizing of part of cost of the equipment which was purchased within projects of production of colored cloth, mixed and colored fabric products.

If necessary in addition to allocate to the Ministry of Finance Fonda for these purposes in 2022 of means at the rate to 250 billion sum from the republican budget.

To the Ministry of Finance according to requests of JSC National Bank of Foreign Economic Activity of the Republic of Uzbekistan to place on the deposit settlement account of means to equivalent 100 million US dollars at the expense of the means which arrived from release and placement of sovereign international bonds on the purposes specified in subitems "b" and "v" of Item 2 of this Decree, respectively for the term of 7 years and 1 year.

At the same time deposit rates shall not be less than the size of rate of quotations of international bonds of the Republic of Uzbekistan in the secondary market on the date of submission of the request of JSC National Bank of Foreign Economic Activity of the Republic of Uzbekistan.

5. Ceased to be valid according to the Presidential decree of the Republic of Uzbekistan of 10.11.2023 No. UP-193

6. To the Cabinet of Ministers to approve in a month:

Procedure for subsidizing of part of cost of the equipment which was purchased within projects of production of colored cloth, mixed and colored fabric products;

Regulations on procedure for forming and use of fund of support of textile industry;

Procedure for realization of cotton fiber at the exchange biddings.

7. To provide to Uztukimachiliksanoat association together with the Ministry of development of information technologies and communications till July 1, 2022 development and start of System of the obligatory automated accounting of cotton fiber.

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