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Investment Council discusses the problems of investors and exporters

IBC
June 11, 2019

On June 11, a meeting of the Business Development and Investment Council under the Government of the Kyrgyz Republic was held under the chairmanship of Prime Minister Mukhammedkaly Abylgaziyev.

Of the eight decisions taken at the last Council’s meeting, five were executed. These include the exclusion of unreasonable requirements when issuing permits for telecom operators and the timing of issuing technical opinions to mining companies when exporting gold ore.

The International Business Council (IBC) actively promoted these initiatives.

The Head of Government raised the issue of the Construction Industry Development Strategy, the decision on which is delayed by state bodies, although the issue was first raised by the Council in 2012.

“The absence of a strategic document and systematic approach entailed legislative contradictions and conflicts over land plots for construction,” Abylgaziyev said.

Despite the government’s green economy policy, there are no mechanisms for implementing the energy saving policy for buildings in the country.

“There is no systematic approach to the operation of residential buildings and the safety of the housing stock. The relevant government agencies do not pay enough attention to improving the situation in the urban planning. We must take more decisive measures to create conditions for the development of the construction sector, including in the regions," Abylgaziyev said.

Among the unresolved issues, there is the problem with the compensation cost for losses of agricultural production and the rate of payment for environmental pollution in subsoil use, said IBC Executive Director Askar Sydykov.

The meeting also considered measures to simplify the procedures for the return of value added tax (VAT) for exporters. Domestic exporting enterprises cannot receive a refund on this type of tax, which reduces the competitiveness of domestic exports, leads to an increase in the trade balance deficit and a reduction in production.

“Without solving this problem, our plans for the development of regions and the creation of new industries and jobs there will not be implemented. The impossibility of obtaining a VAT credit for exporters is a serious constraint when making investment decisions. In this regard, it is necessary to make a reasonable proposal to solve this problem in the interests of the state and business,” Abylgaziyev said.

The business community proposed to expand the simplified VAT refund procedure for bona fide exporting companies and implement the repayment of current VAT debts using the best international practices.

According to the results of the meeting, a number of decisions were made with recommendations to the state bodies.

The Head of Government ordered the First Deputy Prime Minister of the Kyrgyz Republic to the implementation of these decisions take under personal control, so that at the end of the year the results were summed up and the business community was informed about the measures taken.