At the end of 2024, Kyrgyzstan adopted a law on amendments to some legislative acts, which is already at the President's signature. A lot of news emphasise that the innovations may have a negative impact on business by increasing the tax burden and control.
First Deputy Head of the Cabinet of Ministers of the Kyrgyz Republic Daniyar Amangeldiev in his interview with Akchabar told about the changes that will make doing business in Kyrgyzstan easier.

According to the document, the adjustments will affect eight codes, seven laws and 161 articles of the Tax Code. One of the key changes was the cancellation of the universal declaration for individuals. Initially, from 2025 every citizen had to declare their income, but now this obligation will remain only for those who want to take advantage of tax deductions.

‘We originally laid down the principle of simplifying tax administration, and the cancellation of the universal declaration is one of the steps to reduce the bureaucratic burden on citizens,’ Amangeldiev said.

A single income tax rate of 1% has also been set for taxi drivers and couriers. This tax will be automatically withheld from each order on the platform, whether it is ‘Yandex.Taxi’ or courier services. Such a mechanism, according to the authorities, will ensure transparency of taxation and bring this segment of the economy out of the shadows.

‘Now many drivers work unofficially, and the platform acts only as an intermediary. We are eliminating this gap and making the tax system transparent,’ explained the deputy head of the Cabinet.

Another change is the cancellation of zero reports. If a taxpayer has no liabilities for the reporting period, now he is not obliged to submit a blank declaration, which saves the business from unnecessary bureaucracy.

As part of support for green initiatives, the sale of waste paper and scrap metal is exempt from income tax. This should encourage the development of waste recycling facilities and environmentally responsible business.

‘We want waste recycling to become economically profitable. Tax exemption is an incentive for investors,’ Amangeldiyev emphasised.

Tax incentives are available to support local agricultural producers. For example, retail chains will be exempted from VAT when selling domestic agricultural products, which will allow farmers to sell products to large retailers on more favourable terms.

‘It is clear that large chains prefer imported goods because of the difficulties with VAT. Now domestic farmers will be able to compete with them on equal terms,’ Amangeldiev explained.

In addition, owners of vehicles assembled in Kyrgyzstan are exempt from paying the initial registration fee. In this way, the government is stimulating the development of the domestic auto industry, which in recent years has been actively developing with the support of Chinese partners.

A single tax is being introduced for the construction sector, the rate of which will be 6% for cash payments and 4% for non-cash payments. The new procedure will come into effect from 1 July 2025 and will allow construction companies to account for the tax burden in a simplified way.

‘We have discussed this issue with builders. They agree that this option is more convenient and transparent than the current system,’ said the deputy head of the Cabinet.

In addition to relaxations, the new law strengthens control over certain types of activities. In particular, fines are doubled for the turnover of excisable products without excise stamps. Administrative sanctions have also been introduced for the use of payment systems registered to third parties.

In addition, the law provides for a tax amnesty for citizens who have become victims of fraudulent schemes when re-exporting cars. If a vehicle was imported and sold within a year, owners will no longer have to pay income tax.

‘We have received many appeals from citizens who have fallen victim to unscrupulous sellers. We decided that it would be fair to remove their tax obligations,’ Amangeldiev explained.

The changes in the Tax Code have caused controversy: many believe they make life more difficult for businesses. However, Daniyar Amangeldiyev said the document includes measures to reduce bureaucratic procedures and create more favourable conditions for entrepreneurs.

‘Any reform causes criticism, but our goal is to balance the interests of business and the state. We are confident that in the long term these changes will have a positive impact on the economy,’ he concluded.