We all know that today the whole world humanity is going through a difficult period. According to the International Monetary Fund (IMF), today the world economy is almost at a standstill. The current situation is even worse than during the global financial and economic crisis of 2008-2009, as well as the fact that more and more developing countries are affected by coronavirus. According to Kristalina Georgieva, IMF chairman: “Never before in the 75-year history of the IMF have so many countries needed emergency financial assistance – 85 countries have come to us at the same time.”
To meet all requirements, the IMF uses its reserve of 1 trillion dollars and allocates from 50 to 100 billion dollars to finance an emergency.
Of course, the current negative situation in the world does not bypass Uzbekistan. Today, the number of cases of coronavirus infection entering our country from abroad is growing. In addition, the president set specific goals in our country to prevent the spread of the virus. We have all the strength and ability to protect our people from this disaster and cure the disease.
Every effort is made to combat the spread of coronavirus infection and ensure macroeconomic stability in the context of the global crisis, uninterrupted operation of sectors and industries, stimulate foreign economic activity, provide effective social support to the population, and prevent a sharp drop in income.
In this situation, on April 3, 2020, during a videoconference chaired by the President of the Republic of Uzbekistan on supporting entrepreneurs in the fight against the crisis caused by the coronavirus pandemic, the head of state again addressed the people. In his address, the President noted that the state is considering all possibilities to prevent the negative impact of the crisis on the economy, and not to reduce the income of the population, the specific activities of enterprises.
Indeed, in modern conditions it is important to fully support entrepreneurs, create all the necessary conditions for effective service. At the meeting, the President of the country paid special attention to this issue and instructed the leaders of each district and urban sector to manage and work with enterprises in their territories on a regular basis. It was noted that the district department of economic development and poverty reduction created a headquarters to study the problems of each entrepreneur.
Another important aspect of this appeal is that on April 3 of this year, the President signed another important document on the development of our country in order to support our economy and entrepreneurs in such a difficult situation. The decree “On additional measures to support the population, economic and business sectors during the coronavirus pandemic” was a timely document.
So, according to the decree:
Firstly, entrepreneurs engaged in tourism and hotel activities are exempt from paying land tax and property tax until the end of this year. For them, the social tax rate is reduced from the current 12 to 1 percent. This privilege will be able to take advantage of more than 1 thousand entities providing tourism services.
Secondly, the calculation of a fixed amount of personal income tax and social tax for individual entrepreneurs who are forced to suspend their activities for the period of quarantine is suspended. This benefit will help nearly 150 thousand individual entrepreneurs.
Thirdly, small businesses, whose revenue decreased by 50 percent compared with the previous month, are granted the right to defer payment of taxes on turnover, land tax, property tax, social and water taxes until October 1 of this year. The main thing is that entrepreneurs without leaving home can notify the tax office about the use of this benefit.
Fourth, from April 1, 2020, the mandatory requirement for legal entities to make prepayments for gas and electricity is reduced from the current 100 to 30 percent.
Fifth, the scale of assistance to entrepreneurs from the Entrepreneurship Development Support Fund will be expanded.
Currently, the fund compensates 8 percent of expenses on loans to entrepreneurs, the interest rate of which does not exceed 24 percent.
From now on, the state will compensate 12 percent of expenses on loans with an interest rate of up to 28 percent.
For this, more than 400 billion soums will be allocated from the fund to entrepreneurs to cover interest on loans worth 3 trillion soums. The restriction on the provision of a guarantee for only one project of one entrepreneur will also be lifted.
The fund will provide guarantees to entrepreneurs with a positive credit history in the amount of up to 75 percent of the loan amount (currently – 50 percent). The upper limit of the guarantee amount will be increased from the current 8 billion to 10 billion soums.
Sixth, on loans for 12 trillion soums of the population, individual entrepreneurs and enterprises that find themselves in a difficult situation, the terms for fulfilling loan obligations will be extended.
I also signed a separate resolution on financial support for only cotton-textile clusters that are on their feet, which today create many new jobs in villages. According to the decree, the term for repayment of loans that they received in 2019 for harvesting cotton is extended until October 1.
Seventhly, a number of measures are being identified to support the population, especially its socially vulnerable categories.
In particular, until the end of this year, no customs duty and excise tax will be levied on the import of such basic consumer goods as flour, vegetable oil, meat and dairy products, sugar, and hygiene products.
At the same time, the payment of benefits to families with children, child care and material assistance, which expires in March-June of the current year, is automatically extended from 6 months to 1 year without the need for applying and submitting documents. The payment of these benefits to other needy families will also continue.
Thanks to these measures, we will cover more than 120 thousand low-income families (currently 600 thousand).
During the quarantine period, lonely elderly people and persons with disabilities will be provided with 18 basic foods and hygiene products free of charge.
Eighth, we will expand support for home-based activities.
In conclusion, the implementation of the President’s Message and the tasks set forth in the Decree imposes a great responsibility not only on state bodies, but also on every citizen. Therefore, each of us must be aware of our responsibilities, be more united and take an active part in ensuring their timely implementation.
Associate Professor, Department of Economic Theory, KSU