On approval of new fee rates for withholding licenses for the right to use subsurface resources
The procedure for accrual, payment, collection and recovery of arrears of license withholding fee for the right to use subsurface resources was approved. The relevant decision was signed by the Chairman of the Cabinet of Ministers of the Kyrgyz Republic Ulukbek Maripov.
The adopted decision is aimed at observance of national interests in the sphere of subsoil use and improvement of legislative regulation of fees for withholding licenses.
The analysis of the activities of small and medium-sized companies-subsoil users showed that the main purpose of the introduction of these rates- motivation of companies to develop and launch production, has been achieved only partially. Most licenses are held for the purpose of resale – for example, out of 769 licenses only 250 licenses (35%) are carried out works on production of mineral resources.
It should be noted that until 2013, the legislation in the sphere of subsoil use provided for administrative leverage – the relevant state body could cancel the license in case of failure to carry out certain works, since 2015 the economic lever was applied – the payment for license withholding (PUL) was introduced. For the period from 2013 to the present, 2.4 billion soms have been received by local budgets (annual deductions range from 250 to 377 million soms).
However, as practice has shown, the initially established rates did not contribute to the rapid launch of production or reduction of the licensed areas. Therefore, it became necessary to revise these rates.
With the establishment of new rates, companies holding licenses for the purpose of resale will be forced either to conduct mining and geological work, or abandon the licenses, under which subsequently can be attracted investments.
The decision comes into force after fifteen days from the date of its official publication.
On the signing of the Law “On Local State Administration and Local Self-Government”
The President of the Kyrgyz Republic Sadyr Japarov signed the Law of the Kyrgyz Republic “On Local State Administration and Local Self-Government”.
This Law was signed to increase the responsibility of heads of local state administrations – akims, local self-government bodies in solving socio-economic problems of local importance. Therefore, Law of the Kyrgyz Republic “On local state administration” and the Law of the Kyrgyz Republic “On local self-government” were consolidated.
Akim is appointed and dismissed by the President of the Kyrgyz Republic on the basis of the submission of the Chairman of the Cabinet of Ministers in consultation with the Presidential Plenipotentiary in the region.
In order to strengthen coordination of the activities of territorial divisions of state bodies, akims were given the right to appoint heads of territorial divisions of state executive bodies, except for statistical, national security, internal affairs and local military authorities.
In addition, the akim is empowered to appoint and dismiss the heads of executive bodies of local government of aiyl aimaks and cities.
Mayors of cities of regional and republican significance are appointed by the President of the Kyrgyz Republic.
In order to attract qualified personnel and experienced managers, appointments to the positions of akims and their deputies, as well as heads of executive bodies of local government will be made exclusively from the regional and municipal staff reserves.
It is noted that the term of office of heads of executive bodies of local self-government has been increased from 4 to 5 years.
At the same time, the law provides for qualification requirements and restrictions imposed on candidates
for the positions of akim, mayor and head of aiyl okmotu.
In order to comprehensively address issues of socio-economic development of the district, a regional kenesh is created.
The akim is empowered to hear the reports of heads of territorial divisions of state bodies, as well as heads of executive bodies of local self-government in terms of delegated state powers, except for statistics, national security, internal affairs, and local military authorities.
On the adoption of the bill on public procurement
Jogorku Kenesh deputies adopted in the second reading the draft Law of the Kyrgyz Republic “On Amendments to the Law of the Kyrgyz Republic “On Public Procurement” on 7th of October. The initiator of this bill is the Chairman of the Cabinet of Ministers. This bill was considered in the third readings by Jogorku Kenesh deputies on 20th of October.
The purpose of the bill is to improve the system of an electronic government procurement and an introduction of best practices, as well as simplification of procurement procedures and minimization of corruption. The share of the authorized capital of foreign legal entities owning the electronic trading platform should not exceed forty-five percent. The order of accumulation and management of funds shall be determined by a decision of the Cabinet of Ministers of the Kyrgyz Republic.
On the submission of a draft of bill on the labeling of alcohol and tobacco products for public discussion
On October 4th the Ministry of Economy and Finance of the Kyrgyz Republic submitted for public discussion the draft Resolution of the Cabinet of Ministers of the Kyrgyz Republic “On amendments to the Resolution of the Government of the Kyrgyz Republic “On measures to implement the requirements of Articles 98, 242, 255, 257, 258, 280, 281, 287 and 295 of the Tax Code of the Kyrgyz Republic and Article 11 of the Law “On enactment of the Tax Code of the Kyrgyz Republic” dated 30 December, 2008 No. 735”.
In order to ensure the state budget and eliminate possible tax evasion it was proposed to amend the Regulation on the issue and application of excise stamps approved by the Government of the Kyrgyz Republic dated 30 December, 2008 No. 735, where point 3 is proposed to be amended to read as follows: “Marking of excisable products by type, name and capacity (for alcoholic and tobacco products) is made in accordance with the types and numbers of excise stamps specified in the decision of the body of the tax service to issue excise stamps”.
On the adoption of the National Development Program of the Kyrgyz Republic until 2026
The President of the Kyrgyz Republic Sadyr Japarov signed the Decree “On the National Development Program of the Kyrgyz Republic until 2026”.
Thus, influenced by an adoption of the Constitution of the Kyrgyz Republic by referendum on April 11,
2021 and changes in the socio-economic situation in the country, guided by Articles 66 and 71 of the Constitution of the Kyrgyz Republic, it is decreed:
To approve the National Development Program of the Kyrgyz Republic until 2026.
To the Cabinet of Ministers of the Kyrgyz Republic:
– Develop and adopt an Action Plan to implement the National Development Program of the Kyrgyz Republic until 2026;
– to update the investment projects specified in the National Development Strategy of the Kyrgyz Republic for 2018-2040;
– to take appropriate measures arising from this Decree.
The Jogorku Kenesh of the Kyrgyz Republic, judicial authorities, local self-government bodies are recommended to coordinate their strategic documents (concepts, strategies, programs) and action plans with the National Development Program of the Kyrgyz Republic until 2026.
On the adoption of the bill “On the turnover of crypto-assets”
On October 7th deputies of the Jogorku Kenesh adopted in the first reading the draft law “On Amendments to the Law of the Kyrgyz Republic “On turnover of crypto-assets”. The initiator of this bill are deputies Turuskulov J.K., Beshimbaeva A.K., Totonov N.T.
On the submission of the draft bill on High Technology Park of the Kyrgyz Republic (“HTP KR”) for public discussion
On 11th October the Ministry of Digital Development of the Kyrgyz Republic submitted for public discussion the draft Law of the Kyrgyz Republic “On Amendments to the Law of the Kyrgyz Republic “On the High Technology Park of the Kyrgyz Republic”.
It was proposed to amend the Law of the Kyrgyz Republic “On the High Technology Park of the Kyrgyz Republic”, namely in terms of reducing the 80% export requirement for HTP residents. Thus, an
important factor in this case is the popularization of the IT industry. This circumstance is supposed to be achieved by attracting new HTP residents.
However, the discouraging moment here is the requirement to potential residents in the form of orientation of their activities to export and income from it at the rate of 80%. Excluding the established 80% threshold, the project proposes to create favorable conditions for all representatives of the IT-industry.
On the proposal by the Ministry of Economy and Finance to adopt uniform rules for the regulation of prices
On 29th October, the Ministry of Economy and Finance of the Kyrgyz Republic submitted for public discussion the draft Law of the Kyrgyz Republic “On Amendments to Certain Legislative Acts of the Kyrgyz Republic on the State Regulation of Prices”.
The republic has separate articles in the sectoral laws, providing for the procedure of state regulation of prices, while there are contradictory norms in different laws, so there is a need to systematize and adopt uniform rules of price regulation and norms on the order of pricing in the market environment.
On consideration of the Tax Code of the Kyrgyz Republic in the first reading
At the meeting of the Jogorku Kenesh on October 27, deputies considered the draft Tax Code of the Kyrgyz Republic in the first reading.
Minister of Economy and Commerce Daniyar Amangeldiyev presented information on the issue. The proposed draft is aimed at bringing the tax legislation of the Kyrgyz Republic in line with current economic conditions, further digitalization of tax procedures, creating a level playing field for business
and reducing the shadow economy.
During the discussion, Dastan Bekeshev indicated that representatives of the business community opposed to the draft Tax Code of the Kyrgyz Republic. He also raised the issue of Article 4 of the draft Tax Code of the Kyrgyz Republic. “According to the proposed norm, a person who sold two bags of potatoes during the year becomes a businessman. It shouldn’t be like that,” he noted. Moreover, according to Jogorku Kenesh deputy Abdyvahal Nurbaev, the proposed draft exempts law enforcement officers from paying income tax.
Head of the Presidential Administration of the Kyrgyz Republic Akylbek Japarov noted that all citizens must pay taxes, but in the proposed code the norm of exemption of security officers from income tax was left as a compromise.
On approval of the concept of the draft Tax Code of the Kyrgyz Republic
The deputies of the Committee on Economic and Fiscal Policy and the Committee on Budget and Finance on October 26, at a joint meeting approved the concept of the draft law “On introduction of the Tax Code of the Kyrgyz Republic and the Tax Code of the Kyrgyz Republic”, introduced by the Chairman of the Cabinet of Ministers of the Kyrgyz Republic – Head of the Presidential Administration of the Kyrgyz Republic A.U. Japarov on October 21, 2021 № 24-16201.
The draft law is aimed at bringing the tax legislation of the Kyrgyz Republic in line with current economic conditions, further digitalization of tax procedures, creating a level playing field for business and reducing the shadow economy.
On consideration of amendments to the laws in licensing and permit system
At the meeting of the Jogorku Kenesh on October 27th, deputies considered a draft law “On Amendments to Certain Legislative Acts of the Kyrgyz Republic in the field of licensing and permitting system”. The bill was initiated by the Government of the Kyrgyz Republic.
The speaker, Deputy Minister of Economy Bekbolot Aliev noted that since the adoption of the law “On the licensing system in the Kyrgyz Republic” in law enforcement practice arose several difficulties and internal contradictions, which are proposed to eliminate. According to him, the amendments will allow the Cabinet to develop and approve the methodology of risk assessment in the field of licensing and permitting system.
After discussion, the bill was sent for a vote in the first reading.
On approval of the Action Plan to protect the interests of the state in international arbitration courts by the Ministry of Justice.
Considering international arbitration claims initiated against Kyrgyzstan, including the situation around the Kumtor project, on 26th of October the Ministry of Justice approved an Urgent Action Plan to improve the efficiency of protection of state interests in international arbitration and other legal proceedings, as well as to reduce the potential for new arbitration claims.
The set of urgent measures includes:
– Improving investment laws, with an emphasis on
strengthening the state’s jurisdictional immunity;
– introduction of tools to assess the quality of local or international lawyers, and to monitor the level of costs;
– development of a local pool of arbitration experts to work with international lawyers;
– analysis and outreach to state agencies and state employees in high-risk groups.
Implementation of the plan will establish a higher threshold of jurisdictional protection for our state and reduce the potential for new arbitration claims against Kyrgyzstan.
An analysis of the content of all arbitration proceedings initiated against Kyrgyzstan has already begun, the effectiveness of legal representation and the current quality/cost monitoring mechanism are being studied, and the systemic causes that either create risks for new arbitration claims or reduce the effectiveness of Kyrgyzstan’s judicial position are being identified.
It is planned to create a domestic pool of experts and introduce a new format of interaction with international consultants with a focus on the development of a domestic school of legal practitioners in international law and arbitration proceedings.
The practice of “mentorship” for international lawyers and the pool of domestic experts, who will assist external consultants or independently conduct proceedings in certain arbitration and other proceedings, is being considered.
In addition, information and training campaigns will be conducted for government agencies whose activities involve the risk of investment disputes and arbitration claims.
On the establishment of the Ministry of Digital Development
The President of the Kyrgyz Republic Sadyr Japarov signed the Decree “On amendments to some decisions of the President of the Kyrgyz Republic”.
This decree amends the Decree of the President “On the structure and composition of the Cabinet of Ministers of the Kyrgyz Republic and the structure of the Presidential Administration of the Kyrgyz Republic” dated 12 October, 2021.
The Decree provides for the inclusion of the Ministry of Digital Development of the Kyrgyz Republic into the structure of the Cabinet of Ministers of the Kyrgyz Republic to develop and implement the state policy in the field of digitalization and e-government.