The head of the Chamber of Commerce and Industry of Kyrgyzstan calls on businessmen of Kyrgyzstan to legalize their income. Temir Sariev addressed entrepreneurs.
He recalled that the Law «On Voluntary Legalization and Amnesty of Assets of Individuals» came into force in June 2023. The period for voluntary declaration of assets will end on December 31, 2024.
According to the head of the Chamber of Commerce and Industry, the state has taken a course on real changes in order to increase the transparency of the economy, protect the economic and social rights of citizens and increase the attractiveness of the Kyrgyz Republic for domestic and foreign investors.
Legalization of citizens’ assets is a mechanism that has many advantages, but, like any process, can have certain disadvantages, if some conditions are not met during its implementation.
«An obvious advantage of asset legalization is a decrease in the level of the shadow economy. According to the Ministry of Economy and Commerce, the level of the shadow economy in 2023 was about 20 percent of GDP. As international practice shows, the legalization of assets and income helps to reduce the scale of the shadow sector, which improves the transparency of the economy, stimulates competition in the private sector and attracts new investments to the country,» Temir Sariev noted.
Another obvious advantage is an increase in tax revenues. Legalization of assets helps to increase tax revenues to the budget, and this, in turn, allows the state to finance important social programs and infrastructure projects, improving the quality of life of citizens. By the way, the real results of the increase in tax revenues are already visible now — new hospitals and schools are being built, the infrastructure of cities and villages is being improved.
Additional advantages are attracting foreign investment, protecting the rights of workers, increasing citizens’ trust in the state, the head of the Chamber of Commerce of the Kyrgyz Republic added.
He also voiced the possible disadvantages of income legalization:
- Increasing tax burden for some categories of citizens and organizations;
- Difficulties in adapting businesses;
- The need to increase state control.
«There will be strict control from the relevant inspection bodies from January 1, 2025. Therefore, it makes sense to take advantage of the opportunity to legalize income. Citizens and companies that have not taken advantage of the opportunity to legalize their assets and income may subsequently be placed in much more unfavorable conditions, when they will still have to legalize their income and assets, but this will be more difficult and will involve significant costs,» Temir Sariev said.
The Law «On the Voluntary Legalization and Amnesty of Assets of Individuals» was adopted last year, which provides for the legalization of movable, immovable property, money and other assets owned as of January 1, 2023.
Those who indicate property in the declaration are provided with guarantees of asset safety and protection from criminal prosecution. Payment of taxes and customs duties, social security contributions and other mandatory payments on legalized assets is not required. The purpose of the law is to attract the property and income of individuals into legal economic circulation, increase investment in the economy, reduce the shadow economy, ensure guarantees for the safety of assets and protect their owners from prosecution by government agencies for violations before the introduction of voluntary asset declaration.
