Uzbek government to help textile companies to recover

President Shavkat Mirziyoyev signed a decree "On urgent measures to support the textile, clothing and knitwear industry", which specifies a set of measures to mitigate the negative impact of the global economic crisis caused by the pandemic on the development of this industry. This was reported by "Norma.uz"

Calculations and prices

A new procedure is introduced for setting cotton fiber prices and payments:

- the starting price of fiber of domestic production of basic quality is determined by the seller based on the value of the futures at the New York Mercantile exchange for the next month of delivery;

- the deadline for final payments for fiber sold to domestic textile enterprises at exchange auctions for the national currency before April 1, 2020, is extended from 90 to 150 days;

VAT refund procedure will be simplified

Imported raw materials are exempt from customs duties according to the list (not yet published) until January 1, 2022;

A simplified VAT refund procedure is in effect from May 1 to December 31, 2020,. The amount of tax payable (paid) on actually received goods (services) used for export textile and clothing-knitted goods (works, services), except for yarn and fiber, is counted regardless of the amount of foreign currency proceeds received to accounts of enterprises of textile and clothing-knitting industry in the Uzbek bank and shall be returned upon application of the exporter.

The refunded VAT amount or part of it is subject to refund to the state budget within 5 days with interest accrued if:

- foreign currency revenue or part of it is not credited to the exporter's accounts in commercial banks of Uzbekistan within 180 calendar days from the date of release of goods under the export customs regime;

- when conducting a desk tax audit of the validity of the VAT amount claimed for reimbursement, an illegal offset was detected.

The simplified procedure described above applies to enterprises of the textile, clothing and knitting industry, provided that they export goods within the last 12 months, and the overdue export receivables do not exceed $10 thousand.

Financial support and yarn export

Additional funding will be channelled towards investment projects implemented in 2020-2025.