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Government of Kyrgyzstan to resume consideration of cancellation of vehicles tax

The Government of Kyrgyzstan will resume consideration of the cancellation of the tax on vehicles and its inclusion in excise tax within Taza Koom project. Information Support Department of the government’s executive office reported.

It is noted that adoption of the draft amendments to the Tax Code, initiated by the deputies of the Parliament, is inexpedient so far.

«If the bill is adopted, all citizens will pay excise tax equally regardless of the cost of the car. Moreover, even those who do not own and has never owned a car will pay the tax in the purchase of any product or service, as well as when traveling by public transport, since the excise tax as an indirect tax is included in the cost of any product and service through transportation costs,» government believes.

In addition, the administration of tax collections will become more complicated, which may lead to the loss of the revenue side of the budget. The bill violates the principle of fairness of taxation, which is one of the basic principles of the tax legislation of the Kyrgyz Republic.

An increase in the excise tax on fuel will lead to an increase in prices not only for fuel and lubricants, but also for all other goods and services in which the transport component is included. The rise in prices for fuels and lubricants will necessarily lead to an increase in the general level of prices (inflation).

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