A newly enacted law implements tax debt write-offs, abolition of transport tax, new benefits and exemptions, changes to the simplified single tax regime, revised sales tax rates, and restrictions on deductions to curb tax evasion.

The Kyrgyzstan State Tax Service (STS) has announced the implementation of the “Law on Amendments to Certain Legislative Acts of the Kyrgyz Republic on Reducing the Tax Burden for Citizens and Businesses”.

It was signed into law by the Kyrgyz President on 31 July 2025.

The key tax measures of the Law includes:

Tax debt write-off

  • Cancellation of tax arrears for periods before 1 January 2022.
  • For vehicle property tax — cancellation for periods up to 1 January 2025.

Tax benefits and exemptions

  • Abolition of transport tax.
  • Tax breaks for agricultural land.
  • Ban on tax audits for periods up to 1 January 2022, except for unscheduled audits during the liquidation of a legal entity or termination of an individual entrepreneur.
  • Simplified procedure for travelling abroad for taxpayers with outstanding debts.
  • Introduction of a patent taxation system for individual entrepreneurs engaged in trade.
  • Preferential regime for settling tax liabilities, including full or partial exemption from penalties and interest, depending on the repayment deadline.

Changes to the simplified single tax regime

  • Increase in the annual revenue threshold for trading entities from KGS 30 million to KGS 50 million with a 0.5% rate.
  • Introduction of a 0.25% rate for manufacturers and sellers of jewellery.
  • 4% rate for sales to anonymous entities.
  • Abolition of 0.1% and 1% tax rates.

Sales tax rates for goods

  • When selling to entities using a single tax (0% or 0.5%) or working under a patent:
    • 2% for cash payments.
    • 1% for non-cash payments.
  • 2% when selling to anonymous entities.

Taxpayer rating institution

The introduction of a “Taxpayer Rating” system aims to encourage responsible tax payment while fostering a competitive environment.

Limitations on deductions for purchases from special tax regimes

As explained in a subsequent release on the measures, the law restricts tax deductions for general regime entities purchasing goods from patent holders, special zone participants, or entities with a 0.5% single tax rate. This aims to prevent tax evasion and abuse by large market players.