In January 2020, for the first time, textile exports from Uzbekistan outstripped energy exports
Tashkent, Uzbekistan (UzDaily.com) -- According to the State Statistics Committee, in January 2020, textile products worth US$ 155.2 million were exported, which amounted to 12.1% of total exports. Compared to January 2019, it increased by 1.4 times.
Official statistics recorded that textile exports for the first time outstripped energy exports and petroleum products in January (US$ 152.2 million). Gold remains the favorite of the foreign market, which was exported in January for US$ 489.8 million.
The report said that cotton yarn (56.1%), as well as finished knitwear and garments (22.4%), accounted for the bulk of the textile export structure. In January 2020, more than 276 types of textile products were exported to 48 countries. The largest share of textile exports is to the Russian Federation (US$ 60 million - 38.7%), China (US$ 38.9 million - 25.1%) and Turkey (US$ 19.8 million - 12.7%).
The increase in exports of textile products can directly be seen as a result of reforms to produce finished products and create added value in return for the production of raw cotton, the State Statistics Committee said.
What stimulates export, what privileges do Uzbek textile exporters have in 2020? According to the information published on the website of the Uztekstilprom association, there are a lot of them:
Enterprises that have a share of export of finished sewing and knitwear in the total revenue of at least 60 percent according to the results of the reporting period are exempt from property tax for a period up to 1 January 2023.
The taxable base for the tax on profits of enterprises in the textile, sewing, knitting, leather, shoe and fur industries is reduced over the course of seven years by equal shares by the amount of the cost of constructing modern sewage and sewage facilities.
Foreign consultants of the Uztekstilprom Association (and there are five of them) pay a personal income tax in the amount of 50 percent of its established rate on income from sources in the Republic of Uzbekistan.
The procedure for exemption from payment, up to 1 January 2021, of customs payments (except for customs clearance fees) for imported cotton, artificial and synthetic fiber, wool, raw materials and other materials necessary for the production of textile products and not made republic, according to the lists approved in the established manner.
The procedure is maintained in which the costs associated with the payment of interest on loans from commercial banks allocated to sewing and knitting enterprises in 2019-2021, exporting at least 80 percent of finished goods, are covered from the funds of the State Fund for Supporting the Development of Entrepreneurship under the Cabinet of Ministers.
Also the State Entrepreneurship Development Support Fund under the Cabinet of Ministers provides exporters with compensation for covering interest expenses on pre-export loans of commercial banks, including those issued to replenish working capital, up to the Central Bank refinancing rate, as well as guarantees for commercial bank loans of up to 50 percent inclusively of the amount of pre-export credit, but not more than 4 billion soums.
There is a mechanism for providing domestic exporting enterprises (their authorized representatives) subsidies for compensation of up to 50 percent of the cost of transportation by rail for exporting products.
Financial assistance from the Export Promotion Agency under the Ministry of Investment and Foreign Trade is provided to exporting organizations in order to compensate for the costs associated with:
- introduction of international systems of standardization and certification;
- conducting presentations and advertising campaigns, including in terms of promoting domestic products and brands to potential sales markets;
- participation in international tenders and competitions according to the contract;
- registration of domestic products in foreign authorized bodies in accordance with the agreement;
- reimbursement for participation in business seminars, trainings, trade missions and business forums in the regions of the Republic of Uzbekistan;
- reimbursement of expenses for participation in business seminars, trainings, trade missions and business forums in foreign countries;
- covering expenses for participation in exhibition and fair events.
The privilege allowing the Association’s enterprises to purchase textile semi-finished products (yarn, fabrics, knitted fabric, cotton waste, accessories and accessories) with VAT at a zero rate has exhausted itself. All enterprises in the industry switched to paying the generally established amount of VAT (15%).