Tax authorities will be able to deduct Kyrgyz citizens’ debts directly from their accounts

In Kyrgyzstan, there are plans to expand the powers of the tax authorities: they will be able to recover citizens’ debts directly from bank accounts and e-wallets. The relevant amendments are being put forward for public consultation.

This concerns the implementation of provisions of a law previously passed by parliament. The draft resolution proposes to establish a mechanism whereby the State Tax Service under the Cabinet of Ministers of the Kyrgyz Republic will be able to request banks to automatically deduct recognised debts.

Only so-called ‘recognised’ tax debts are subject to write-off. These include:

• amounts specified by the taxpayer themselves in their tax returns;
• assessments not appealed within the prescribed time limit;
• debts confirmed by a court ruling;
• debts voluntarily acknowledged by the taxpayer.

If the debt is disputed, direct deduction of funds from the account is not permitted.

Under the proposed mechanism, in the event of non-payment of the debt, the tax authority sends a demand to the bank, after which the financial institution is obliged to transfer the relevant amount to the budget. Failure to comply with the requirements will result in liability under the law.

A similar mechanism has previously been applied to legal entities. It is now planned to extend this to individuals, including funds held in bank accounts and e-wallets.