Kyrgyzstan Eliminates Trade Tax License System

Bishkek, 10 July 2024 – The State Tax Service of Kyrgyzstan has reported that a total of 82,886 entrepreneurs operating in the field of trade under the license tax system have made the switch to other tax regimes. This move comes following the abolition of trading activities based on a license in the republic as of July 1, 2024.

Out of the total number of entrepreneurs who transitioned to different tax regimes, 65,745 opted for a simplified taxation system based on a single tax, while 17,141 business entities, particularly those operating in Dordoi and Turataly el Bazary (Kara-Suu) shopping and entertainment centers classified as strategic objects, moved to a special tax regime.

The State Tax Service highlighted that while the license tax system, which was introduced in the 1990s, played a vital role in stimulating and developing small and medium-sized businesses in the country, it also resulted in certain negative consequences such as uneven distribution of tax payments and the growth of the shadow economy.

With the aim of improving and modernizing tax administration, reducing the shadow economy, establishing a fair tax system and providing comfortable conditions for taxpayers, the decision was made to abolish licenses in the field of trade.

This move is expected to bring about a more transparent and efficient tax system, ultimately benefiting both businesses and the economy as a whole.



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