BISHKEK, Kyrgyzstan, December 2. The Kyrgyz Ministry of Economy has revised a draft resolution on adjusting the procedure for determining the Value Added Tax (VAT) base and sent the updated document for further discussion, Trend reports via the ministry.
The draft, which amends the Cabinet of Ministers' Resolution No. 60 of February 5, 2025, is intended to improve tax administration, prevent unjustified undervaluation of the VAT base, and ensure fair competition among compliant businesses.
A multitude of observations was articulated throughout the interagency endorsement process and the public engagement sessions. To form a unified position, meetings with government bodies, business representatives, and associations were held on November 13 and 21.
The revised draft includes several key clarifications. VAT risk-based tax base rules will not apply to entities registered with the State Tax Service’s Office for Control of Large Taxpayers. For others, the tax base using risk indicators will be calculated from the average market price of the product, reduced by 30 percent. The compendium of significant fiscal contributors will be administered by the revenue authority in accordance with the applications and solicitations submitted.
The VAT tax base, inclusive of risk indicators, will undergo biannual updates, specifically prior to the deadlines of December 20 and June 20.
VAT is a major pillar of Kyrgyzstan's fiscal system. In 2024, VAT revenues constituted approximately 35–40% of the total collected taxes managed by the State Tax Service, making its effective administration crucial for the state budget.
The Office for Control of Large Taxpayers (UOKPN) manages businesses that meet specific turnover thresholds. This division is vital, as fewer than 1,000 businesses managed by the UOKPN historically contribute over 60% of the country's total tax revenue. The exclusion of these entities from the newly implemented risk-adjusted VAT computation is strategically designed to mitigate operational disruptions for the state's foremost and most compliant tax contributors.
The original Cabinet Resolution No. 60 of February 5, 2025, which this draft amends, was part of a broader push to combat the shadow economy through digital means, notably through the mandatory use of electronic consignment notes (ETTN) and the electronic invoicing system, launched in 2023.
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