Published
04/21/2026, 10:18The start of 2026 turned out to be less successful than expected for Kyrgyzstan’s local budgets. Despite digitalization and stricter administrative measures, property tax revenues have declined. But the biggest setback has been in the real estate sector.
According to the Ministry of Finance, property tax revenues in January–February amounted to 199.9 million KGS, compared to 237.7 million KGS a year earlier. Thus, the budget fell short by nearly 40 million KGS in this category alone.
Property tax is traditionally considered the main source of property-related revenues. Within this segment, the commercial sector bears the key burden—153.9 million KGS, while residential properties account for 45.8 million KGS.
Overall, property tax revenues totaled 454.4 million KGS, compared to 566.3 million KGS a year earlier. The budget fell short by over 110 million KGS, or about 20%.
Land tax also declined to 248.9 million KGS (–60 million KGS year-over-year). At the same time, the bulk of revenue continues to come from urban and commercial land.
Tax on vehicles and other movable property remains nominal—just 5.47 million KGS—and has no significant impact on the overall picture.
The decline in revenue comes amid tax administration reform. At the beginning of the year, a system for automatically calculating property tax based on cadastral data was introduced.
However, instead of the expected increase in revenue, the system malfunctioned. Previously, “Akchabar” reported on cases where the area of properties in the database increased significantly, and tax assessments rose exponentially. This sparked a wave of complaints. As a result, the State Tax Service of the Republic decided to suspend automatic deductions and begin verifying the data.
The problem is exacerbated by the fact that property taxes are almost entirely allocated to local budgets. This means that it is the regions that will be the first to feel the impact of the shortfall in property tax revenue.
