[{"bbox": [96, 178, 408, 204], "category": "Section-header", "text": "## Domestic Revenue Mobilisation"}, {"bbox": [96, 233, 1132, 602], "category": "Text", "text": "In 2023, total tax revenues increased by 28.6% compared to 2022, while the tax-to-GDP ratio increased to an estimated 25.5% of GDP in 2023 from 23.4% of GDP in 2022 and from 16.4% of GDP in 2020. Tax revenues from income tax increased by 28.8%, profit tax increased by 56.9%, and VAT receipts increased by 34.4% in 2023 compared to 2022. Customs revenues increased strongly by 50% in 2023 compared to 2022 due to the effect of increased cross-border trade. Overperformance came as a result of the economic recovery in 2022 and 2023, as well as improvements in tax administration, analysis and monitoring of all sectors of the economy. SMART Sales tax procedures and digitalisation projects are also yielding results, including the introduction of electronic invoices, cash registers, and the consolidated post system for accounting of goods within the EAEU. Revenue collection is expected to continue to benefit from strong growth rates and from new digital tools such as the cash machines that were introduced in 2022, which report transactions automatically to the tax service. The State Tax Service continues the implementation of its Development Strategy 2023-2025. At the end of 2020, the World Bank initiated a technical assistance project (which extends to 2025) in order to improve revenue collection, especially in V.A.T. The State Customs Service followed up on the implementation of its own plan for the development of the Customs Service 2022-2024."}, {"bbox": [96, 627, 1090, 876], "category": "Table", "text": "<table><thead><tr><th>Revenue</th><th>2021<br>(actual)</th><th>% GDP</th><th>2022<br>(actual)</th><th>% GDP</th><th>2023 (actual)</th><th>% GDP</th></tr></thead><tbody><tr><td>GDP (bln KGS)</td><td>723,122</td><td></td><td>919,445</td><td></td><td>1,125,550</td><td></td></tr><tr><td>Tax revenue, including:</td><td>151,185</td><td>20.9</td><td>228,962</td><td>24.9</td><td>294,439</td><td>26.2</td></tr><tr><td>Income Taxes</td><td>12,533</td><td>1.7</td><td>16,939</td><td>1.8</td><td>21,817</td><td>1.9</td></tr><tr><td>Profit Taxes</td><td>7,759</td><td>1.1</td><td>18,002</td><td>2.0</td><td>28,238</td><td>2.5</td></tr><tr><td>VAT</td><td>63,634</td><td>8.8</td><td>107,616</td><td>11.7</td><td>144,795</td><td>12.9</td></tr><tr><td>Other Taxes</td><td>67,259</td><td>9.3</td><td>86,404</td><td>9.4</td><td>99,589</td><td>8.8</td></tr></tbody></table>"}, {"bbox": [101, 880, 803, 904], "category": "Text", "text": "Source: Kyrgyz authorities, Year 2023 contains the latest data on Tax Revenues"}, {"bbox": [96, 946, 1132, 1182], "category": "Text", "text": "On 18 January 2022, Kyrgyzstan enacted a new Tax Code. The new legislation includes provisions that aim at optimising tax structures, simplifying procedures, improving tax administration, ensuring the stability of the tax system, further improving the digitalisation of tax procedures, creating equal conditions for doing business and reducing the shadow component of the economy. The Code establishes a tax on electronic commerce activities with a rate of 2 % and a tax of 2 % for non-cash trading. The obligation to pay VAT is introduced for foreign companies providing services in electronic form without using a domain name or IP address registered in the Kyrgyz Republic, the place of delivery of which is recognised as the territory of the Kyrgyz Republic (“Google tax”). Since mid-2022, the MoF has started the process of evaluating and revising the existing regime of tax incentives."}, {"bbox": [96, 1192, 1132, 1351], "category": "Text", "text": "The revenue mobilisation policy was formulated in the newly adopted State Tax Service Development Strategy 2023-2025 (December 2022). Specific elements of this Strategy stem from the last TADAT assessment (2017) and include: (i) integrity of the registered taxpayer base; (ii) effective risk management; (iii) timely filing of tax declarations; (iv) accurate reporting on tax declarations; (v) efficient revenue management; (vi) accountability and transparency; (vii) use of SWOT-analysis and SMART principles. The changes in the tax policy and tax administration were also necessitated by the harmonisation processes with EAEU³ requirements."}, {"bbox": [96, 1357, 1132, 1516], "category": "Text", "text": "Since 2019, the State Tax Service has been administering insurance premiums transferred from the Social Fund of the Kyrgyz Republic, reducing the administrative burden on legal entities and individuals. It carried out all the necessary operations for transferring social contributions from the income part of the budget of the Social Fund to the centralised accounting system of the Single Treasury Account. In 2020, the State Tax Service developed a service for obtaining voluntary, compulsory patents and insurance policies in electronic form in a taxpayer's personal account."}, {"bbox": [96, 1523, 1132, 1575], "category": "Text", "text": "Consistent with its Development Strategy and with an aim to improve surveillance and increase revenue collection, the State Tax Service has introduced the large-scale projects within the framework of digital economy, including"}, {"bbox": [85, 1621, 756, 1645], "category": "Footnote", "text": "³ Eurasian Economic Union: Russia, Kazakhstan, Belarus, Armenia, Kyrgyzstan"}, {"bbox": [1026, 1681, 1141, 1705], "category": "Page-footer", "text": "Page 13 of 34"}]