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IBC proposes reducing payments for compensation of agricultural land loss

IBC
September 10, 2016

IBC proposed to abolish the relevant amendments to the legislation at the meeting with representatives of state bodies, including the Economy Ministry, the Justice Ministry, the Department of Cadastre and Registration of Rights to Immovable Property of the State Registration Service under the Government of the Kyrgyz Republic, and others.

The Resolution of the Government of January 5, 2016 introduced a new multiplier of 49 for the provision of land plots for subsoil use and the multiplier of 99 - for land ownership. As a result, the new payment rates have increased excessively and have become excessively burdensome for the exploration and mining companies.

"We do not understand why the Resolution’s developers have established a fixed rate 49, because mining companies usually receive licenses to use land plots for a much shorter period," the IBC Mineral Resources Committee members commented the Government’s decision.

Prior to the introduction of the new order, the amount was determined according to the actual period of land use, and companies paid for the duration of their licenses. It was convenient for subsoil users, who have licenses to explore for two or three years with the subsequent extension, as over the years, the area could be reduced or returned.

Not only the payment under the new terms will increase excessively but the subsoil users are also obliged to pay it at once, otherwise they will be denied a right to use the land.

For example, a small company with a licensed area of 60 hectares paid 241,000 soms before the adoption of new regulations, and now it has to pay a lump sum 1,118,000 soms for 49 years in advance, while the company's license is valid for 10 years only.

IBC offered to calculate the sum of the losses of agricultural production according to the actual term of land use, according to the previous version of the Government Resolution of February 14, 1998.

IBC also advised to divide the total amount into annual payments that the company would not pay for the years when the land will not actually be used (for example, if a company is deprived of the license, or mineral deposit is not discovered, etc).

To speedy solve this issue, IBC proposed to establish an interdepartmental working group with the participation of the State Committee for Industry, Energy and Subsoil Use of the Kyrgyz Republic and representatives of the business community.