Kyrgyzstan reduces tax burden on businesses and population

President Sadyr Zhaparov signed the Law “On Amendments to Certain Legislative Acts of the Kyrgyz Republic on Reducing the Tax Burden on the Population and Business Entities.”
The law introduces a number of tax breaks. 

Tax arrears for tax periods prior to January 1, 2022, as well as property tax on vehicles for periods prior to January 1, 2025, will be written off.

Tax benefits and exemptions will be introduced. In particular, the transport tax will be abolished and tax benefits for agricultural land will be introduced. Tax audits are prohibited, except for unscheduled audits in the event of the liquidation of an organization or the termination of an individual entrepreneur's activities, for tax periods until January 1, 2022. The procedure for leaving the country for taxpayers with arrears is also simplified.

A patent taxation system is being introduced for individual entrepreneurs engaged in commercial activities. A preferential regime for the fulfillment of obligations is being established, providing for full or partial exemption from the payment of accrued tax penalties, as well as the payment of penalties depending on the deadline for payment of the full amount of arrears.

Changes are being made to the single tax. The annual revenue threshold for commercial entities has been increased from 30 million to 50 million KGS at a rate of 0.5%. A rate of 0.25% has been set for manufacturers and sellers of jewelry. When selling goods to unidentified entities, the rate will be 4%. Rates of 0.1% and 1% are also abolished.
A sales tax rate is established for the sale of goods to entities applying a single tax (0% and 0.5%) and operating under a patent. The rate will be 2% for cash payments, 1% for non-cash payments, and 2% for sales to unidentified entities.

In addition, a “Taxpayer Rating” system is being introduced to encourage honest tax payment and create a competitive environment.
The law aims to create a favorable business environment and will help maintain economic stability and development in the country.