RESOLUTION OF THE CABINET OF MINISTERS OF THE KYRGYZ REPUBLIC

of August 4, 2023 No. 388

About efficiency evaluation of tax benefits

For the purpose of implementation of article 36 of the Tax Code of the Kyrgyz Republic, according to articles 13, of the 17th constitutional Law of the Kyrgyz Republic "About the Cabinet of Ministers of the Kyrgyz Republic" the Cabinet of Ministers of the Kyrgyz Republic decides:

1. Approve the Evaluation procedure of efficiency of tax benefits according to appendix.

2. Recognize invalid:

1) the order of the Government of the Kyrgyz Republic "About efficiency evaluation of tax benefits" of December 8, 2016 No. 646;

2) the order of the Government of the Kyrgyz Republic "About modification of the order of the Government of the Kyrgyz Republic "About efficiency evaluation of tax benefits" of December 8, 2016 No. 646" of August 16, 2017 No. 487.

3. This resolution becomes effective after seven days from the date of official publication.

Appendix

to the Resolution of the Cabinet of Ministers of the Kyrgyz Republic of August 4, 2023 No. 388

Evaluation procedure of efficiency of tax benefits

1. General provisions

1. This Evaluation procedure of efficiency of tax benefits determines types of efficiency evaluation of the tax benefits operating or planned to provision, the sequence of actions when evaluating, cast and their interaction, and also requirements for preparation of results of assessment (further - the Procedure).

2. The basic concepts and terms used in this Procedure:

tax benefit - the exemption of tax or its part provided by the Tax code of the Kyrgyz Republic;

efficiency of tax benefits - the ratio of result of activities of the corresponding industry for the period applications of tax benefit with result for preceding period respectively characterizing extent of goal achievement of provision of tax benefit by on taxpayers.

3. Main objectives of tax benefits are:

- stimulation of sustainable development of economy of the Kyrgyz Republic;

- investment attraction and financings to priority sectors of economy for sustainable development;

- achievement of the main priorities of the National strategy of development for the country;

- social support of the population;

- encouragement socially useful, including charitable, activities.

4. The efficiency evaluation of tax benefits is made by two types:

1) efficiency evaluation of the operating tax benefits;

2) efficiency evaluation of the tax benefits planned to provision.

5. The efficiency evaluation of the tax benefits operating and planned to provision is not performed for the tax benefits established in the relation:

- the budgetary institutions financed from the government budget of the Kyrgyz Republic;

- public authorities of the Kyrgyz Republic and local government bodies.

2. Efficiency evaluation of the operating tax benefits

6. The efficiency evaluation of the provided tax benefits is carried out annually according to the List of the tax benefits which are subject to efficiency evaluation of tax benefits according to appendix 6 to this Procedure.

7. In case of need evaluating efficiency of tax benefits at the initiative of state bodies, business associations and subjects of entrepreneurship, assessment is performed before the term of the corresponding stage on the tax benefits specified in appendix 6 to this Procedure.

8. The efficiency evaluation of the operating tax benefits consists of four stages:

1) the authorized tax authority and/or authorized body in the sphere of customs affairs carries out provisional estimate following the results of which brings in the authorized state body having functions and powers on regulation of tax legal relationship, carrying out tax and customs policy (further - authorized state body), analytical note with appendices 1 and 2, or 3 and 4 to this Procedure. The National Statistical Committee of the Kyrgyz Republic enters in authorized state body information according to appendices 1 or 3 to this Procedure;

2) the authorized state body creates the interdepartmental working group which considers provisional estimate of authorized tax authority and/or authorized body in the sphere of customs affairs;

3) the interdepartmental working group based on provisional estimate of authorized tax authority and/or authorized body in the sphere of customs affairs carries out final assessment.

If necessary the interdepartmental working group asks authorized state body to request data from state bodies, business associations and subjects of entrepreneurship.

The interdepartmental working group brings in authorized state body analytical note with appendices 1 and 2, or 3 and 4 to this Procedure;

4) Authorized state body based on final assessment of interdepartmental working group:

- develops the project of regulatory legal act about prolongation of tax benefit, with establishment of effective periods of tax benefits;

- develops regulatory legal act about cancellation of tax benefit.

9. The analytical note about efficiency evaluation of tax benefits for the analyzed period is posted on the official site of authorized state body.

10. The analytical note without fail contains the following information:

1) about influence of tax benefit on financial and economic and social indicators of separate categories of taxpayers;

2) about dynamics of financial and economic and social indicators of activities of separate categories of taxpayers;

3) about estimated amount of tax benefits by the types of tax which did not come to the budget owing to application of the considered tax benefit according to authorized tax authority;

4) information with indication of the concretized indicators on compliance of the studied tax benefit with the purposes:

- as sustainable development of economy of the Kyrgyz Republic was stimulated;

- whether investments and financing into priority sectors of economy for sustainable development were attracted;

- whether the main priorities of the National strategy of development for the country are reached;

- whether it is directed to social support of the population;

- whether activities were encouraged socially useful, including charitable;

5) about change of receipts of tax payments in the government budget on separate categories of taxpayers to which tax benefits are provided;

6) about efficiency evaluation results with obligatory specifying of one of the following conclusions: the privilege is effective and is subject to prolongation, or the privilege is not effective and is subject to cancellation;

7) other information connected with goal achievement of evaluating efficiency of the provided tax benefits.

11. The efficiency evaluation of the operating tax benefits includes:

1) assessment of social and cost efficiency of the provided tax benefits - for the purpose of impact assessment of use of tax benefits on dynamics of financial and economic and social indicators of activities of separate category of the taxpayers applying tax benefit;

2) assessment of budget efficiency of provision of tax benefit - for the purpose of impact assessment of provision of tax benefits on the income of the government budget.

12. Assessment of budget, social and cost efficiency of the provided tax benefits is carried out on each type of tax concerning each of the provided tax benefits taking into account the data which are available for authorized tax authority about financial and economic and social indicators of activities of taxpayers which used tax benefit.

13. Assessment of social and cost efficiency of tax benefits is performed for the purpose of, specified in the subitem 1 of Item 11.

14. Tax benefits have positive social and cost efficiency if positive dynamics at least on 5 financial and economic and social indicators of activities, the taxpayers considered in calculations is reached.

15. Assessment of budget efficiency of tax benefits is performed for the purpose of, specified in the subitem 2 of Item 11.

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