1. LEGAL HEADLINES IN DECEMBER 2022
- Under the landmark Decree of the President of Uzbekistan No. UP-269 dated 21 December 2022, the President implemented the following unprecedented administrative reform:
- Secretariats, departments for economics and social spheres, as well as attached departments, Inspectorate for the Protection of Cultural Heritage, the Department for Financial and Logistics support for the activities of Paramilitary Structures, Department for Support of Mahalla and Older Generation, within the executive structure of the Cabinet of Minister of Uzbekistan is abolished;
- The number of the ministries is reduced from 25 to 21 (by joinder of the ministries of economy and finance, construction and housing & utilities, higher education and investments, pre-school and school), 20 governmental departments are abolished as a whole, and independent governmental executive bodies are reduced from 61 to 28;
- Functions of all new governmental structures were specified and they were given independence in a number of decision-making authorities and other administrative reforms.
- An Investment Program for 2023-2025 has been approved in the newly adopted Resolution of the President of Uzbekistan No. 459 dated 28 December 2022 and it sets forth Uzbekistan’s investment policy for 2023-2025, targeted parameters, list of investment projects, concepts of existing, perspective and new investment projects, as well as roadmaps for state authorities to implement investment policy;
- Under the newly adopted Decree of the President of Uzbekistan No. 60 dated 21 December 2022, the following incentives are given to exporters of textile products:
- business entities that timely repay loans issued at the expense of the Export Promotion Agency and related to export are allowed to allocate additional loans in proportion to the repaid part of the loan;
- until 1 January 2024, when exporting products from fabrics and knitted fabrics to European countries, Turkey, Egypt, and Morocco, subsidies are provided to compensate for 70% of transportation costs;
- Under the newly adopted Order of the Director of the Agency for management of the state assets No. 3403 dated 19 December 2022, real estate objects of ministries, departments, and local governmental bodies that have not been used for more than three months will be traded at the tender.
2. RATIFICATION OF THE IZMIR AGREEMENT
On 5 December 2022, the President of Uzbekistan signed the Law approving ratification of the Izmir Agreement – a multilateral agreement signed by Afghanistan, Azerbaijan, Iran, Kazakhstan, Kyrgyz Republic, Pakistan, Tajikistan, Turkey, Turkmenistan and Uzbekistan in 1996, which is a foundation document of the Economic Cooperation Organization (ECO).
Ratification allows Uzbekistan to be a full-fledged member of ECO and it will allow Uzbekistan to increase the volume of foreign investment, expand transport and logistic corridors, including through the unification of tariffs for transit traffic, as well as increase the tourist attractiveness of Uzbekistan’s regions.
ECO’s main cooperation areas include trade, transport and connectivity, energy, tourism, economic growth and productivity, social welfare, and environment, and the main strategic objective of ECO is to double intra-regional trade and increase ECO share in the global trade and specifically exports, increase share in global trade and tap regional trade potential for economic growth.
3. GASOLINE PRICING STABILIZATION
Under the newly adopted Resolution of the President of Uzbekistan “On measures to ensure uninterrupted provision of consumers with motor gasoline in the autumn-winter period and to prevent a sharp increase in its prices” No. PP-440 dated 12 December 2022, starting from 10 December 2022 until 1 March 2023, as an exception, the state authorities will apply the zero-excise tax rate for AI-80 gasoline, imported, produced by domestic enterprises, and sold by business entities to end consumers.
To control the implementation of this rule, the relevant state authorities will inspect business entities on the facts of illegal and inefficient use of energy resources without interference in their financial and economic activities. Based on the results of these inspections, these authorities will be allowed to submit petitions to the law enforcement authorities on the application of penalties established by acts of legislation against officials who have allowed excessive losses and theft of motor gasoline, as well as giving a legal evaluation of their activities.
4. ELECTRIC CARS - INCENTIVES
According to the newly enacted Resolution of the President of Uzbekistan “On measures to provide state support for the organization of the production of electric vehicles” No. PP-443 dated 19 December 2022, until 1 January 2030, the following are canceled:
- recycling fee for electric vehicles and hybrid vehicles produced in Uzbekistan;
- customs duty for components (car sets) of electric vehicles and hybrid vehicles imported from abroad, raw materials and materials, equipment, and technological equipment, including spare parts for service, according to the lists formed in the prescribed manner.
Further measures aimed at creating infrastructure for electric cars are as follows:
- starting from 1 January 2023:
- business entities are granted the right to sell (realize) electric energy through electric vehicle charging stations;
- tariffs (prices) for vehicle charging services are set by business entities independently, regardless of the approved electricity tariffs.
- starting from 1 January and until 1 January 2026:
- land tax on legal entities - electric vehicle charging stations, as well as land plots on which parking lots (parking lots) are located, property tax on legal entities - electric vehicle charging stations;
- income tax - business entities whose main activity is the provision of vehicle charging services (having a share of the revenue from this type of activity in the total sales volume of 50% or more);
- a turnover tax on income from the provision of vehicle charging services;
- customs duty - charging stations for electric vehicles, their components, and technological equipment of the service infrastructure imported from abroad according to the lists formed in the prescribed manner.
Starting from 1 January 2024, the installation of electric vehicle charging stations in projects of shopping and business centers, entertainment complexes, gas stations, hotels, and infrastructure facilities along international and state roads under construction in Uzbekistan will become mandatory.
