Tax exemptions of General Motors Uzbekistan, SamAuto and JV MAN Auto-Uzbekistan are canceled; The introduction of drip irrigation in cotton production will be subsidized; Indian Rimtex Industries plans to launch production in Uzbekistan; Railway stations to be transferred to investors; Uzbekistan and Belgium to strengthen cooperation in textile industry; Uzbekhimmash Plant to build a new foundry.
Tax exemptions of General Motors Uzbekistan, SamAuto and JV MAN Auto-Uzbekistan are canceled
President of Uzbekistan Shavkat Mirziyoyev abolished tax incentives of General Motors Uzbekistan, SamAuto and JV MAN Auto-Uzbekistan. This is envisaged by the presidential resolution on the forecast of the main macroeconomic indicators and the parameters of the state budget for 2019 and budget guidelines for 2020–2021. According to the document, they are now exempted only from paying value added tax (VAT).
Earlier GM Uzbekistan was exempt from all taxes and mandatory payments. Manufacturers of components, materials and tooling also did not pay VAT, income tax and property tax in terms of fixed assets used for their production.
SamAuto was also exempted from income tax, property tax of legal entities, land tax from legal entities, VAT and mandatory contributions to the extrabudgetary Fund for the development of the material and technical base of educational and medical institutions under the Ministry of Finance. The Uzbek-German joint venture JV MAN Auto Uzbekistan was freed from corporate income tax, VAT and obligatory payments to the Republican road fund.
The introduction of drip irrigation in cotton production will be subsidized
The state will subsidize the introduction of drip irrigation systems in the cotton industry. 120 billion soums will be allocated for these purposes in 2019.
Producers of raw cotton will be provided with a subsidy for the introduction of drip irrigation technology in the amount of 8 million soums per hectare of cultivated area of raw cotton at the expense of the state budget.
10% of the interest rate on loans for the construction and reconstruction of drip irrigation systems and the purchase of their components in terms of value not exceeding 20 million soums per hectare established by a commercial bank will be covered by the State Fund for Supporting the Development of Business Activities under the Cabinet of Ministers.
Indian Rimtex Industries plans to launch production in Uzbekistan
On December 27, a meeting with a delegation of the Indian company Rimtex Industries was held at the State Investment Committee of the Republic of Uzbekistan. The purpose of the meeting was to discuss the implementation of the project on the organization of the production of technological basins and fast-wearing parts for spinning equipment.
Representatives of the Indian company noted that they plan to start production in 2019. The Tashkent region was set as a preliminary site. The company’s plans include foreign direct investment in the amount of $2.6 million in the first stage with the creation of 65 jobs, including 60 local specialists and 5 Indian engineers and managers.
In order to optimize the cost of production, the project is planned to be implemented jointly with the Turkish company Temsan.
Railway stations to be transferred to investors
By the summer, it is planned to prepare a draft decision of the President, which will launch the reorganization of Uzbekistan Temir Yollari.
In particular, they will take away state-imperious powers from the company and transfer them to a new state body that will be responsible for all transport policy in the country.
In addition, private capital will be more actively let into the sector – railway stations, hotels, dining cars and the right to provide container terminals will be gradually outsourced and sold to private and foreign investors.
Uzbekistan and Belgium to strengthen cooperation in textile industry
On December 22, 2018, the Ambassador of Uzbekistan to the Benelux countries Dilyor Khakimov met with the managing director and the sales manager of Picanol, the leading Belgian company in weaving industry, the press service of the Foreign Ministry reported.
During the meeting, the sides exchanged views on practical issues of further cooperation and expanding the presence of Picanol’s high-tech weaving machines in Uzbekistan.
The representatives of Picanol noted that today they have partners in almost every region of Uzbekistan, where they produce textile products using their own equipment.
Uzbekhimmash Plant to build a new foundry
The Government of Uzbekistan approved the main technical and economic parameters of the feasibility study of the investment project “Modernization of the foundry on the basis of Uzbekhimmash Plant”. According to the resolution of the Cabinet of Ministers, the modernization of the foundry will be completed by December 2019.
The cost of the investment project is $23.77 million. At the same time, the volume of investments in new equipment will be $12.76 million. The project is financed through a loan from Uzpromstroybank in the amount of $20 million and Uzbekhimmash Plant’s own funds – $3.77 million.
The annual capacity of the plant after modernization will amount to 4,000 tons of suitable casting, of which 0.5 thousand tons of products will be supplied to foreign countries.