President of Kyrgyzstan Sadyr Japarov signed the decree on creating a favorable tax environment for business entities and increasing the interest of insured persons in state social security. The press service of the head of state reported.
It is noted that, taking into account the challenges facing the country’s economy, special attention is paid to stimulating and supporting business entities. But many of them continue to work in the informal sector. This hinders the development of competitiveness and innovative potential of the republic.
The current rate of insurance premiums is one of the most pressing problems faced by business representatives.
Social contributions paid by the employer significantly exceed the amount of tax deductions, creating grounds for understating the wages of employees and contributing to the emergence of an unfavorable economic environment for the development of entrepreneurship.
To create more favorable conditions, stimulate activity, increase the availability of financial resources and ease the financial burden for business, the President instructed the Cabinet of Ministers to submit for consideration to the Parliament draft laws providing for:
- Reducing the rate of insurance premiums from 27.25 to 12.25 percent for business entities;
- Responsibility of employers for concealing wages (income) paid to employees;
- Determining of requirements for establishing wages (income) for tax purposes and calculation of insurance premiums;
- Establishing a standard for deductions from income tax to the republican budget.
In addition, the Cabinet of Ministers must provide additional allocations to the Social Fund in the republican budget.
It is emphasized that the reduction in insurance premium rates will not affect the following areas:
- Budgetary organizations and highly profitable industries (mining);
- Provision (supply) of electricity, gas, steam and conditioned air;
- Information and communication;
- Sale of excisable goods (alcohol, tobacco products, fuels and lubricants);
- Commercial banks, specialized financial and credit institutions.
