What changes are being implemented in the tax code?

As of May 19, 2023, at 3:22 p.m., significant amendments are underway in the tax code. On March 6 of this year, the Jogorku Kenesh approved a series of revisions to the Tax Code, which are set to take effect once they receive the signature of the head of state.

The key objectives of these amendments primarily concern the regulation of cash machines, electronic invoices, and electronic consignment notes. These objectives include:

- Providing support to small and medium-sized businesses within the country.

- Facilitating the formalization of businesses and their transition to legal operations.

- Reduction of fines related to tax matters.

- Offering debt relief to regions in the southern part of the country that have been adversely affected.

- Granting VAT exemption for the import and domestic sale of electric cars.

- Extending the registration deadline until January 1, 2024, specifically for agricultural producers, cooperatives, trade, and logistics centers.

Regarding these changes, Kalygul Saliev, legal adviser to the JIA business association and a member of the tax legislation working group, as well as a partner at FinJust Consult, stated, "The leadership of the country has demonstrated a clear determination to address economic challenges. President Sadyr Japarov's series of decrees aimed at improving the investment climate and bolstering the state budget are noteworthy. With the adjustments made by our working group, we anticipate that the revised Tax Code will outperform its predecessor by better aligning the interests of both the state and businesses, thereby maintaining a harmonious equilibrium."

Saliev emphasized the significance of creating a favorable tax environment characterized by manageable rates and a straightforward tax structure, which consistently entice investors. This, in turn, benefits entrepreneurs who are inclined to fulfill their tax obligations ethically, rather than exposing themselves to corruption risks. Saliev highlighted the necessity of simplifying tax administration procedures and minimizing tax rates to eradicate shadow economic activities. He argued that a larger number of entities contributing lower taxes can potentially yield greater budgetary contributions compared to a smaller number of entities taxed at higher rates.

Kalygul Saliev, a partner at FinJust Consult and a member of the tax legislation working group, shared these insights with the business publication Tazabek, demonstrating the implications of these changes on the business landscape. 

Source: Tazabek @tazabek_kg (Publication featuring Kalygul Saliev) 🤗✨ (as of May 19, 2023)