IBC Suggests Improvement of Customs Administration
OREANDA-NEWS. June 27, 2012. At a meeting of the Council for Business Development and Investment under the Government of the Kyrgyz Republic, IBC Executive Director Aktilek Tungatarov, on behalf of the business community, made suggestions for improvement of customs administration, reported the press-centre of IBC.
IBC proposed to abolish VAT on fixed assets that companies import for their own production goals. “We should remember that companies import fixed assets not only as a contribution to charter capital, but to also with a view to its subsequent use in the production process. For example, banking institutions use specific equipment such as ATMs, POS-terminals, etc.
“VAT on imports of fixed assets would be justified if the equipment that the companies import, would be produced in Kyrgyzstan,” said Tungatarov. “However, high-tech equipment is not produced here, and in order to improve their operation, companies have to import it.”
In this situation, companies have to include the VAT tax expenditures in the cost of manufactured goods and services. As a result, the consumer - the population of Kyrgyzstan suffers. However, according to article 259 of the Tax Code, if a company would sale the imported assets it would have to pay the VAT.
The meeting also discussed the implementation of mechanisms to assess the risks of tax evasion and improve tax reporting in accordance with the advanced international practice. The participants considered the tax legislation impact on the telecommunications, and the appeal of the business community to the Government on the Workers Recovery Fund, the State Service for Combating Economic Crimes, the Open Skies project and the draft law "On Amendments and Additions to the Labor Code."