Kyrgyzstan's Tax Breaks for Creatives Spark Debate: Investment or Loopholes?

A recent presidential decree in Kyrgyzstan, offering significant tax incentives to bloggers, IT companies, and the film industry, has ignited a fervent national discussion. Proponents view the initiative as a groundbreaking step, capable of transforming Kyrgyzstan into a leading regional center for the digital economy. However, the decree has also drawn skepticism, with many questioning the specific ưu tiên given to bloggers and expressing concerns about potential loopholes for tax evasion.

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You see the decree? I opened the document and was surprised myself.

Kanyshai Mamytova, director of the Park of Creative Industries, and Asel Umarova, chairwoman of the Supervisory Board of the Association of Creative Industries, provided an exclusive interview to 24cast, detailing the origins and intent behind the decree. They emphasized that the tax benefits are not merely a "gift" to bloggers but a strategic investment in the nation's economic future. The initiative aims to foster growth within the creative sector, which they believe will have a ripple effect on the broader economy.

Both Mamytova and Umarova expressed surprise at the decree's announcement, noting it was unexpected even for those within the creative industries. Mamytova recounted a prior discussion with the State Tax Service regarding a proposed increase in the unified tax rate for park residents from 1% to 2%. The decree's provision of a zero tax rate was thus a significant and welcome surprise. Umarova echoed this sentiment, noting the initial confusion and subsequent need for clarification within the film industry.

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Many decided that this was the initiative of the park, that we lobbied for it, but that is not the case.

Crucially, the decree itself does not alter existing tax legislation. Mamytova explained that the president has instructed the Cabinet of Ministers to prepare and submit a package of amendments to the Tax Code to the Parliament (Jogorku Kenesh). Only after parliamentary approval and the president's signature will the new tax regulations officially come into force. This legislative process is essential for the decree's implementation and for clarifying its scope and application, particularly concerning the Park of Creative Industries.

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Because the decree itself does not change the tax legislation. The President instructed the Cabinet of Ministers to prepare a package of amendments to the Tax Code and submit it to the Jogorku Kenesh.