Kyrgyzstan bets on future economy with tax breaks for tech and creative sectors

Kyrgyzstan's President has enacted a decree providing a five-year tax exemption for software developers, information system creators, bloggers, startups, and producers of film, video, and television content. This initiative, signed on June 12, signals a strategic shift towards fostering the nation's "economy of tomorrow" by prioritizing the growth of the creative and digital industries.

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Because the world is changing. And the economy is changing too. Twenty years ago, the economy was based on factories, production, trade, raw materials. Today, technologies, digital products, content, intellectual property play a huge role. The President is essentially saying something very simple: Kyrgyzstan must be competitive not only in traditional industries but also in the new economy.

The decree has sparked public debate, with some citizens and bloggers deeming the tax breaks unfair to other taxpayers. Almamet Shykmaтов, head of the State Tax Service, explained that the decision reflects the changing global economic landscape, where technology, digital products, and intellectual property play increasingly significant roles. He stated that Kyrgyzstan must remain competitive not only in traditional sectors but also in this emerging digital economy.

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This is an investment by the state in future growth. People somehow imagine the situation as if the budget is losing huge amounts of money. But let's be honest: a large part of the creative economy has been operating for many years either as self-employed, on patents, or on a very small scale. The state has not received significant tax revenues from this sector before. Bloggers pay peanuts. So now we are actually giving the industry an opportunity to grow.

Addressing criticism about preferential treatment, Shykmaтов emphasized that these are not "benefits for benefits' sake" but rather state investments in future growth. He argued that many in the creative economy previously operated on a small scale, paying minimal taxes. The government's aim is to enable this sector to expand significantly, ultimately leading to job creation, substantial tax revenues, and export potential in the coming years.

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Yes. But in order to receive much more in the future. Any large company was once small. Any successful business once started with a few people or even one. If today such projects are given the opportunity to develop, in a few years they will create jobs, pay serious taxes, and work for export. That is precisely the calculation.

Regarding the inclusion of bloggers, Shykmaтов acknowledged the controversy but stressed that the president's decision considers the long-term potential. He views successful modern bloggers not just as individuals with phones, but as small media entities employing teams of operators, editors, designers, marketers, and producers. The initiative is designed to nurture these nascent businesses into larger, more impactful enterprises.

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Yes, I am aware. Some famous bloggers even say themselves: 'We don't need this, we already pay taxes.' It's not quite like that, but now I don't want to argue with them, and I'll even say that they are right in some ways. But the president makes decisions not for one specific blogger. He looks much further. Today, many perceive a blogger as a person with a phone, but a modern successful blogger is already a small media outlet. Behind them are operators, editors, designers, marketers, producers.