On February 20, 2020, the Ministry of Economy of the Kyrgyz Republic held a board meeting on the results of 2019.

IBC Executive Director Askar Sydykov voiced the opinion of the business, proposing to create a specialized professional body for pre-trial settlement of tax disputes in Kyrgyzstan, using international best practices.

The meeting was attended by Economy Minister Sanjar Mukanbetov, head of the Department of Economics and Investment of the Government Office of the Kyrgyz Republic Alymbek Orozbekov, board members, representatives of government bodies and the business community.

The meeting considered results of the activities of the Economy Ministry for 2019, the country’s position in the Doing Business rating, the strengthening of the Kyrgyz Republic’s activities in the EAEU, the problems and prospects of developing public-private partnerships in the Kyrgyz Republic, as well as the impact of tax dispute resolution on the economy and investment climate in the Kyrgyz Republic.

According to Economy Minister Sanjar Mukanbetov, in 2019, macroeconomic and social stability was ensured in the country, positive growth rates of GDP were achieved (the real GDP growth rate was 4.5%, excluding enterprises developing the Kumtor gold deposit — 3, 8%).

Economic growth was ensured by all major sectors of the economy, including: in agriculture, the volumes actually increased by 2.6%; in industry — by 6.9% in construction — by 10.6%; in the service sector — by 2.9%.

The main contribution to GDP growth was made by the industrial sector (a contribution of 1.27 percentage points, with a real growth rate of 6.9%, mainly due to the growth of metal production at enterprises developing the Kumtor deposit), as well as the service sector, whose contribution to GDP amounted to 1.35 percentage points, with a real growth rate of 2.9%.

Daniyar Abdyldaev, Director of the PPP Center under the Economy Ministry, informed about the current situation, problems and prospects for the PPP development in the Kyrgyz Republic. The PPP Center was created to promote public-municipal and municipal infrastructure PPP projects in the Kyrgyz Republic through attracting private investment and private sector managerial experience using PPP mechanisms.

In the Kyrgyz Republic there are currently 29 PPP projects that are at different stages in such sectors as healthcare, transport, culture, tourism, education, and three projects are under implementation.

Andrei Krasnikov, an expert from the Economy Ministry, of spoke on the impact of tax dispute resolution on the economy and investment climate in the country. According to him, some taxes are quite complicated in calculating the tax base. These mainly include VAT, income tax, sales tax, excise tax, and some others.

Currently, there is a difficult situation in taxation in the Kyrgyz Republic: there are facts that reduce the country's investment attractiveness and hamper the development of the Kyrgyz economy. An analysis of these facts shows that urgent action is required: tax disputes are of concern.

As international experience shows, in many developing and developed countries tax disputes are considered by specialized professional pre-trial and judicial authorities. This approach allows to reduce the number and terms of dispute resolution and significantly improves the quality of decisions.

It should be recognized that the tax dispute resolution system in the Kyrgyz Republic does not meet modern requirements. There is a need to create a professional body for pre-trial consideration of tax disputes, as well as to begin work on the formation of a specialized tax court.

Given the critical importance of this issue, before the creation of such a specialized body, it was proposed to create a collegial body under the Government of the Kyrgyz Republic for the consideration of tax disputes.