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Gazprom Kyrgyzstan demands 10 percent of profit tax from developers

Gazprom Kyrgyzstan LLC requires 10 percent of the profit tax from developers, the deputy of the Parliament Ekmat Baibakpaev said today.

According to him, there are problems in gratuitous transfer of external engineering networks from builders to the private firms, providing supply of electric energy and gas. «A developer, having built a dwelling house and connecting the engineering networks to it, subsequently transferred them to service companies free of charge. According to point 2 of Article 189 of the Tax Code of the Kyrgyz Republic, these facilities were not subject to profit tax on the assumption that the service company was more than 50 percent state-owned or owned by the Kyrgyz Republic," Ekmat Baibakpaev said.

«In recent years, many private companies have appeared on the market, providing energy resources that don’t fall under the category of economic entities with state participation. Bishkekgaz demands from developers to pay 10 percent of the profit tax on the cost of gratuitously transferred networks. Despite the fact that the developer has already born considerable costs for the laying of utility networks, which include the costs of related taxes. According to developers, the requirement of Gazprom Kyrgyzstan LLC and private energy companies to pay income tax is unfounded, as an unfair taxation is made," the deputy added.

Ekmat Baibakpaev developed a bill that eliminates this norm.