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Friday 3 August 2018

Kyrgyz Economy Ministry Proposes to Raise Sales Tax


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BISHKEK (24.kg) — The Ministry of Economy of Kyrgyzstan has developed amendments to the Tax Code and proposes to raise the sales tax from 2% to 5%. The head of the ministry Oleg Pankratov confirmed the information to 24.kg news agency.

According to him, the issue has been discussed for a long time. As a result, it was decided to move away from the sales tax. First, the exporters were exempted from the sales tax, and then the non-cash transactions. The tax increase is not connected with the need to replenish the budget. In this matter, Oleg Pankratov said:

The sales tax increase is not related to the fiscal burden. There is another goal — to fight against the shadow economy. We want to stimulate business to work legally. When the issue was discussed, we considered different options — a complete ban on cash transactions, fines. But we are against prohibitions. A business subject should have a choice. If he or she wants to work with cash, they will pay a larger tax. This stimulates the business to switch to non-cash payments faster.

The increase in the tax on retail sales will be applied to all business entities. Technically, everything is ready. The abolition of the sales tax for non-cash settlements showed good results. Business is always looking for an opportunity to pay less taxes. In fact, the sales tax is transformed into a tax on retail sales to the population.

The Kyrgyz Ministry of Economy noted that there were no specific terms for the entry into force of the innovation. Amendments to the Tax Code should be approved by the Parliament of Kyrgyzstan, which will start working only in September.

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