The recommendations and proposals that were previously sent to the Jogorku Kenesh of the Kyrgyz Republic as part of parliamentary hearings were considered.
Many recommendations of the banking sector were supported and taken into account in the draft amendments, the Economy Ministry reported.
These are recommendations from members of the International Business Council (IBC) to address gaps in the deduction of interest expense accrued by banks on an accrual basis. The recommendation was also taken into account to eliminate the gap in the offset by commercial banks of VAT payable as tax agents.
Consensus options have been developed on previously raised issues related to banking secrecy. Thus, a request from the tax authority for information on account transactions will be carried out only as part of tax audits and upon a reasoned decision of the tax authority, and it will only concern legal entities and individual entrepreneurs.
The IBC head Askar Sydykov voiced the need to take into account other important recommendations previously sent to the Cabinet of Ministers and the Parliament. These recommendations addressed issues such as applying a zero sales tax rate on cashless transactions from the beginning of 2023 (retroactively); exclusion of double liability for non-use of invoices; implementation of legislative incentives for the use of energy and resource efficient technologies; inexpediency of the proposed high tax rates on income from the extraction of certain metals; application of a zero VAT rate for exports of metal-containing ores, concentrates, alloys and refined metals to the EAEU countries.
In order to improve the tax administration of the excise tax, IBC recommended to expedite the adoption of the state classifier of products by type of economic activity for further differentiated regulation by the state.
The second reading of the draft amendments to the Tax Code of the Kyrgyz Republic will be considered on March 6 at a meeting of the Parliament Committee on Budget, Economic and Fiscal Policy.