Uzbeks will be able to buy securities on the local stock market through funds from voluntary funded pension contributions. This is provided for by the president’s Sep 2 Additional measures to develop the capital market Decree, the Ministry of Justice said.
The Ministry of Economy and Finance must submit to the Cabinet of Ministers a bill providing for this possibility within two months. At the same time, citizens will be able to independently dispose of additional income received from the purchase and sale of securities and in the form of dividends (interest), also until they reach retirement age.
In addition, the document is planned to provide employees of enterprises with a pre-emptive right to purchase shares in the event of a public offering within the framework of the ESOP program introduced by the enterprise (a form of employee remuneration that provides them with equity participation in the company). While, their funds, which do not exceed their monthly salary and payments equivalent to them, which are directed to the purchase of shares, are exempt from personal income tax (PIT).
In addition, it is planned to extend until December 31, 2028 (now until December 31, 2024) the benefits provided for by Presidential Decree No. PP-90 dated January 17, 2022 “On Additional Measures to Implement Effective Mechanisms to Support the Capital Market.”
In particular, before this date:
- income accrued in the form of dividends on shares of individuals - residents and non-residents are exempt from income tax;
on income accrued in the form of dividends on shares of non-resident legal entities, a 5% income tax rate is applied by analogy with resident legal entities;
- income in the form of accrued interest on bonds of business entities of individuals and legal entities - residents and non-residents are exempt from personal income tax and corporate income tax.
It is also planned to exempt from personal income tax the taxpayer's income directed from wages and other incomes, totaling up to 100 times the minimum wage during the tax period (98 million soums), to an individual investment account for the purchase of securities issued on a local stock exchange. market, provided they are not returned within 12 months.
From October 1, after the placement of shares of enterprises with a state share of 50% or more on the stock market, by means of a public invitation, at least 30% of the net profit of these enterprises will be used to pay dividends for at least 7 years, with the exception of restrictions established by law.
For enterprises with a state share of 50% or more, the restriction on the amount of payment for underwriters' services when placing securities on the stock exchange is lifted. Prior to this, the amount should not have exceeded the amount originally set in the contract by 10%, regardless of the difference between the planned and final placement volume.
From December 1, 2023, the National Agency for Perspective Projects (capital market regulator) is granted the right to make orders to consider the issue of changing the issuer's executive body and suspend the issue of securities by the issuer for late disclosure of information and reporting provided for by acts of legislation on the securities market two or more times within one year.
As noted in the document, these measures are aimed at protecting the rights of minority shareholders and investors and stimulating their involvement in the capital market.
In addition, the obligatory requirement to have an official website of joint-stock companies whose securities are not included in the listing of the stock exchange is canceled, with the exception of JSCs with a state share of 50% or more.
As reported earlier, the National Agency for Advanced Projects, which is responsible for crypto policies, has become the regulator of the capital market, having received the tasks, functions and powers of the Ministry of Economy and Finance in this area. Also, the "Central Securities Depository" is transformed into a JSC, and its shares in the authorized capital are transferred free of charge to the Central Bank of Uzbekistan.