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Development of small business and private entrepreneurship in Uzbekistan

Botschaft Usbekistan, December 29, 2015

Small business and private entrepreneurship represent a sphere of labour application and a source of income generation for a significant percentage of the country’s population. Moreover, it is the most flexible part of the national labour market, covering a lion’s share of predominantly low-skilled manpower, those with insufficient practical experience and those preferring flexible working hours. Very often, it is the only economic sector, where many socially vulnerable strata of population, such as women, young people, uneducated and unskilled persons, can find a job.

In his report at a Cabinet of Ministers sitting, dedicated to the results of the Republic’s socio-economic development in 2014 and main priorities of the 2015 National Economic Program, President Islam Karimov accentuated, in particular, that the contribution made by small business and private entrepreneurship to the formation of GDP grew from 31 per cent to 56 per cent between 2000 and 2014. Their share of manufactured goods rose from 12.9 per cent to 31.1 per cent in the same period. At the present time, more than 76.5 per cent of all employed citizens are working in the sector, compared with 49.7 per cent in 2000.

In a move to accelerate the development of this sector of the national economy, the creation of an auspicious environment, including the provision of privileges and comprehensive assistance to indigenous entrepreneurs, is indentified as a core priority. The activity carried out by many organizations and departments is aimed at achieving this very objective. And the Chamber of Industry and Commerce of the Republic of Uzbekistan is one of them. Set up on the initiative of the President of the Republic of Uzbekistan, it runs structural sub-divisions in all the regions, including 14 territorial directorates, 127 information-consultative and business centers, 14 arbitration tribunals, 3 training-resource centers and 21 unitary enterprises. Closely cooperating with state authorities, the Chamber of Industry and Commerce is contributing considerably to a steady rise in confidence on the part of local entrepreneurs and to the solidification of their partnership with the state.

What’s more, there are ongoing efforts by the government of the Republic of Uzbekistan to create in the country a business environment that is highly conducive to the rapid development of entrepreneurial activity and an attractive investment climate. This work includes, in particular, the improvement of the regulatory-legal base, the provision of a range of privileges and preferences intended for small businesses, entrepreneurs and overseas investors, and the elimination of bureaucratic barriers and obstacles they face when it comes to the organization and running of their entrepreneurial activity. In particular, a draft law, “On the introduction of amendments and additions in the Law of the Republic of Uzbekistan, “On guarantees of free entrepreneurial activity “ is designed to further facilitate the development of entrepreneurship, to grant a bigger freedom of entrepreneurial activity and to simplify the current procedure for their formation. The draft law also contains a separate norm concerning the presumption of innocence of an entity of entrepreneurship, which treats whatever contradictions and vague points that may emerge in the course of entrepreneurial activity in an entrepreneur’s favour, with such a provision making an appreciable contribution to a fuller and more reliable protection of the latter’s legitimate rights and vested interests.

The major purpose of the Law, “On family entrepreneurship” is to create a necessary legal framework for the development of family-based entrepreneurship in various sectors of the national economy as an essential form of small business and private entrepreneurship, as well as for the strengthening of legal guarantees intended for family businesses and creation of new jobs. In addition, the Law specifies a family enterprise’s participants, outlines a mechanism of their registration and closing down, and simplifies procedures for linking up family enterprises to infrastructural facilities. Moreover, somewhat simplified procedures are stipulated for book-keeping and taxation of family enterprises.

The principles of stimulation and encouragement that ensure the development of small business and private entrepreneurship comprise the provision of tax breaks, application of a simplified taxation system, allotment of credit on preferential terms, reduction of both the periodicity and term for presentation of tax and book-keeping reports to the state tax and statistical bodies, as well as ways of cutting the periodicity of tax and other check-ups.

Tax breaks have an important role to play in supporting entrepreneurs and small businesses with the help of economic stimuli.

Tax privileges imply a complete or partial exemption from taxes of legal entities and physical persons with a taxable base, in conformity with the country’s tax legislation. These privileges are introduced in conformity with the Tax Code of the Republic of Uzbekistan, decrees and resolutions of the President of the Republic of Uzbekistan.

Source: «Business partner.uz» newspaper


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