20.08.2021

On August 20, the President of the Republic of Uzbekistan Shavkat Mirziyoyev held an open dialogue with entrepreneurs of our country.

At the event, which became the first meeting in this format, attended about ten thousand entrepreneurs.

The small business and private entrepreneurship are identified as the priorities of the economy of our country. Over the past five years, about 2 thousand laws, resolutions and decrees were adopted to develop this sector.

For business, 114 licenses and permits were canceled; a notification system was introduced for 33 types of activities. The procedures for obtaining permits have been simplified and on average, the terms for their issuance have been reduced twice. Superfluous inspections have been taken up, restrictions related to the circulation of cash, currency and raw materials have been lifted.    

As a result of such opportunities, the number of new business entities is growing rapidly and the existing ones are expanding their activities. The number of entrepreneurs has almost tripled over the past five years. Many business people have expanded their business on a national scale, creating thousands of jobs and growing into large, successful companies. A class of entrepreneurs with their own brand in the domestic and external markets began to form. 

President has mentioned some of such energetic and selfless entrepreneurs, and thanked them for their support of our people.

Before this open dialogue, a collection of appeals on controversial issues and problems of entrepreneurs was announced. More than 15 thousand applications were received on various issues.

In his speech, the President outlined 7 important directions for their solution. The first dimension concerns business financing, the second one - improving the tax system and reducing the tax burden on business, the third one is aimed at improving the procedure for providing land, the fourth one - developing infrastructure, the fifth one - supporting export enterprises, the sixth one - the transport and logistics sector, the seventh one - to simplify business procedures.

President has outlined the current tasks in each area and put forward new initiatives.

For example, 40% of inquiries relate to business financing and financial and credit issues. In particular, it was noted that many loans are issued at high interest rates and for a short period, on conditions that are unfavorable for an entrepreneur. Also, foreign currency loans create additional expenses for the entrepreneur due to the growth of the exchange rate.

In this regard, measures have been identified to increase the capital of banks. In particular, next year banks will receive an additional $ 600 million from the Fund for Reconstruction and Development on market principles. Eurobonds in national currency in the amount of 5 trillion Uzbek soums will be placed on international financial markets. There will be ample opportunities for foreign banks to enter the Uzbek market.

Another important innovation will be the introduction of a system of lending to entrepreneurs in Uzbek soums, regardless of the currency in which banks attract resources. For this, a Currency Risk Management Company with branches in the regions will be created under the Ministry of Finance.

Over the past three years, the number of taxes has been reduced from 16 to 9. Until recently, contributions to the pension, school and road funds were paid at a rate of 3,2%, which was a heavy burden on business. These fees were withheld from turnover regardless of profits, and their amount was at least 25-30 % of corporate profits. The rates of property tax, income tax, and social tax were halved.

President has noted that additional preferences will be created for entrepreneurs in this direction.

In particular, entrepreneurs registered in economic zones before the adoption of the Law «About Special Zones» in February 2020 will retain the benefits provided to them.

A procedure will be introduced for refunding the amount of overpaid value added tax to members in special economic zones within 7 days. This will allow them to increase their working capital.

In addition, entrepreneurs will not be charged interest and will not require a deposit when paying value added tax in installments for 120 days,.

The tax rate for the use of mineral resources for the production of building materials will be reduced by 2 times.

Stressing the importance of supporting the service sector in a pandemic, the President instructed to extend the benefits provided to them last year. By the end of the year, public catering enterprises will be exempt from paying land and property taxes, and travel companies and hotels - from tourist taxes for a period of 2 years.

According to the current procedure, entrepreneurs, along with reporting, are obliged to separately apply to the tax authorities to collect the difference in value added tax. This relates to 14 thousand entrepreneurs, it takes their time and money.

Therefore, the responsible persons were instructed to introduce the procedure for the return of value added tax without additional documents from next year.

Another problem that worries entrepreneurs is the allocation of land. On this occasion, the President received more than 4 thousand appeals.

On August 16 of this year, the Law «On Amendments and Additions to Certain Legislative Acts of the Republic of Uzbekistan in connection with the improvement of the procedure for the granting of land plots and their use, as well as the system of land registration and maintenance of the state land cadastre» was adopted. Thus, a solid legal basis was created for the introduction of land into economic circulation, turning them into an object of trade and collateral.

From now on, agricultural land will be provided only for lease on the basis of an open tender. A non-agricultural land will only be sold through an auction.

Naturally, many entrepreneurs are concerning about the future of the land plots where their business is located. The President noted that the land plots currently occupied by these enterprises will be registered in their ownership.

A particular attention was paid to providing business entities with infrastructure. It was noted that from January 1 next year, the state will be fully responsible for the supply of electricity grids, gas pipelines, water supply and road infrastructure for projects worth 200 billion Uzbek soums.

Today, this procedure directed only to projects of foreign investors worth more than $ 50 million.

In addition, over the next two years, another 200 industrial zones will be created throughout the country, which the state will provide with engineering communications and road infrastructure. For these purposes, 2 trillion Uzbek soums will be allocated from the budget next year.

Another problem that entrepreneurs complain about is that small businesses have the same electrical connection requirements as large businesses.

In this regard, from the beginning of next year, a convenient system will be introduced - the connection to the power grids will be completely carried out through an electronic platform, and all processes will be combined into one. The term for connecting entrepreneurs to the power grids will be 10 days for capacities up to 20 kilowatts and 20 days for 50 kilowatts. If the power supply company does not complete the work on time, it will pay compensation to entrepreneurs.

President has also put forward a number of initiatives to support export enterprises and attract small businesses to export activities.

For example, last year, during a pandemic, a VAT refund procedure was introduced for textile enterprises without waiting for foreign exchange earnings from exports. From now on, this procedure will apply to honest and disciplined exporters from all industries.

Thus, enterprises that export products worth more than $ 20 million a year per year will receive preferential loans worth up to $5 million.

It was noted that today high customs duties are imposed on the import of certain types of raw materials. As a result, products are cheaper to import than to produce.

In this regard, the government was instructed to reduce the rates of import duties on raw materials and semi-processed products.

The issues of development of transport and logistics services, facilitation of cargo for entrepreneurs were also touched upon. It has been determined that the privileges for the import of trucks and railway cars will be extended for another 3 years.

There have been given many resolutions for reducing business interference and making it easier to obtain subsidies.

During the dialogue, entrepreneurs spoke about their problems, expressed their opinions and proposals. Each case was discussed with the participation of responsible persons and khokims.

President has suggested holding such open dialogues traditionally and establishing August 20 as the Day of Entrepreneurs in our country. These proposals were widely supported by the participants.