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Tatiana Kim on Fiscal Policy of the Ministry of Finance

Tatiana Kim

April 23, 2013

In early March 2013 the Government of the Kyrgyz Republic decided to transfer the fiscal policy functions from the Ministry of Economy to the Ministry of Finance. The business community reacted negatively to this decision, thinking that it was dictated by International Monetary Fund (IMF), and in fact hands over to IMF some functions of fiscal policy elaboration and administering. Business community sent a letter to President Almazbek Atambayev and Prime Minister Jantoro Satybaldiev.

Lately the Ministry of Finance has initiated a few amendments to the fiscal legislation, which confirmed fears of business community.

Here are the suggested changes:

Addition to the Article 334 of Tax Code of the Kyrgyz Republic. It proposes increase in zonal coefficient from current ranging 0.3 - 1.2 to 1.2 - 5.0 for Bishkek and Osh (for non-agricultural lands). This addition suggests five-times increase in land tax rates in Bishkek and Osh.

Insertion of two legislative norms into two active laws of the KR: “On financial and economic framework of local self-government” and “On non-tax payments.” It gives to local self-government bodies the right to collect other local taxes, not specified by active legislation and defined by local keneshs (councils).

Attached you can find the full commentary of Tatiana Kim, the Chairman of Chamber of Tax Consultants and Public Advisory Council under the State Tax Service (available in Russian language only).

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