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🇰🇬 Kyrgyzstan /Economy & Trade

Kyrgyzstan Slashes Shadow Economy by Over Half

From 24.kg · () Russian

Translated from Russian, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • Kyrgyzstan's shadow economy has been reduced by more than half in recent years, according to Prime Minister Adylbek Kasymaliyev.
  • Digitalization of the tax system, automated accounting, and electronic invoices have been key factors in this reduction.
  • The government aims to increase the country's economy to over $30 billion and per capita GDP to $5,000 by 2030.

The shadow economy in Kyrgyzstan has shrunk by over half in recent years, a significant achievement attributed to a concerted effort towards digitalization and transparency in the tax system. Prime Minister Adylbek Kasymaliyev stated that this reduction was facilitated by the implementation of digital tax systems, automated accounting processes, and the widespread adoption of electronic invoices.

Kasymaliyev emphasized that these improvements were achieved without increasing the number or rates of major taxes. In some areas, tax burdens were even reduced. He noted that the electronic accounting system now provides tax authorities with visibility into the movement of goods between suppliers and businesses, making it considerably harder for companies to conceal sales volumes and income.

Now, I won't name the exact figure, but in my opinion, it has more than halved.

— Adylbek KasymaliyevPrime Minister of Kyrgyzstan, estimating the reduction in the shadow economy.

Addressing entrepreneurs, the Prime Minister urged them to conduct their businesses openly and pay taxes on time. He assured that the state is committed to protecting the rights of legitimate businesses, including shielding them from undue pressure by law enforcement and other government bodies. However, he also cautioned that failure to declare income and pay taxes would result in legally stipulated penalties.

The positive economic trends are reflected in the GDP per capita, which has risen from approximately $1,250 in 2020-2021 to $3,075. The government has set ambitious goals, aiming to expand Kyrgyzstan's economy to over $30 billion and increase per capita GDP to $5,000 by 2030. To ensure economic growth benefits citizens, salaries for public sector employees, including teachers and doctors, have been doubled since April 1, with an additional 62 billion som allocated for public sector wage increases in 2026. Pension increases are also planned starting October 1.

Work honestly and openly, we are ready to protect your rights. But if incomes are hidden and taxes are not paid, legally provided fines will be applied.

— Adylbek KasymaliyevPrime Minister of Kyrgyzstan, addressing entrepreneurs and outlining the state's stance on tax compliance and business protection.
DistantNews Editorial

Originally published by 24.kg in Russian. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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