As per the tax and budget policies for 2024, the tax rate for limestone intended for cement production in Uzbekistan has been reduced by almost 4 times.
Initially, the budget address of the Ministry of Economy and Finance (MEF) to parliament touched upon plans to reduce the rate by 2 times from 22.5 thousand to 11.25 thousand soums per ton, but in the end it further dropped to 6,000 soums.
While, the reduced tax rates for coal-fueled cement factories have been cancelled.
Market situation
As the MEF said, in recent years, cement production capacity in Uzbekistan rose by 1.8 times - from 15.1 million tons in 2019 to 26.7 million tons in 2023. Production volume during this period increased 1.4 times - from 10.9 million to 15.2 million tons.
The demand for cement in Uzbekistan over the years has increased 1.2 times - from 13.8 million to 16.5 million tons per year as a result of the growing volume of construction work.
Cement imports fell by almost half - from 3.3 million to 1.7 million tons. In 2022, supplies mainly came from Tajikistan, Kyrgyzstan and Kazakhstan.
35 cement factories operate in Uzbekistan with total production capacity of 26.7 million tons. According to official data, domestic enterprises cover 92% of the cement demand in the country (in 2019 it was 79%).
According to the MEF, the average price of cement on the exchange trades from 2020 to 2023 due to sufficient volume increased only by 4.6% - from 626 thousand to 655 thousand soums per ton.
The ministry expects that domestic companies will be able to cover 98% of demand in the domestic market.
