On September 29, 2021, a meeting of the IBC Mineral Resources Committee was held.

Recent results summed up

The meeting participants were informed about the results of the work done over the past period. At meetings in remote regions, held by IBC from July 26 to August 8, together with representatives of the Presidential Administration, the issues of interaction of the local population with mining companies, regional development funds, etc. were considered.

At a meeting at the Ministry of Energy and Industry on September 7, IBC voiced the main risks associated with the impossibility of obtaining ISO 17020 accreditation by all interested inspection companies by September 1, 2021. As a result, delays and disruptions in the shipment of mineral raw materials are possible, which will lead to a disruption of tax revenues to the country's budget.

Current issues discussed

The MRC members discussed the draft of the new Tax Code of the Kyrgyz Republic in terms of taxation of mining and processing enterprises. They considers the norms that cause concern among companies, including issues related to the introduction of "reverse" VAT, which will cover a wide range of services provided by foreign organizations outside the territory of Kyrgyzstan. The meeting participants emphasized the need to finalize the new Tax Code.

The committee members are concerned about the possible consequences of the suspension of the membership of the Kyrgyzaltyn OJSC in the LBMA. The loss of Good Delivery status, as well as the high cost of services provided by Kyrgyzaltyn refinery will negatively affect some companies in the industry, complicate the execution of certain contracts, and also affect the price of gold and gold-containing concentrates. In this regard, it was decided to ask the government to consider the possibility of assistance in providing a discount on refining services. The meeting participants also proposed to initiate the issue of revising the rates for income tax when selling gold ore, gold concentrate and gold alloy (Dore alloy).

After discussing the draft amendments to the Model Regulations on Regional Development Funds, the meeting participants decided to develop their recommendations.

The committee members discussed the issues of accelerating the process of transferring the reclamation accounts of mining companies to commercial banks with a 100% state share in accordance with the latest amendments to the Regulation on the reclamation of lands disturbed in the process of subsoil use. The participants proposed to contact the Ministry of Energy and Industry to assist in speeding up the process of transferring funds from the reclamation account, including obtaining written consent from the authorized state body.

Issues of labor legislation (on sick leave, taxation of hot meals provided to employees working on a rotational basis) and other issues related to taxation in the industry were also considered.