KYRGYZSTAN TODAY Policy briefs on - Department of Geography

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to transfer to schools, hospitals, and other charitable institutions as charitable gifts. To make such donations more attractive for business, it can be advised to calculate the amount of donations based on gross proceeds, i.e. 0.1 or 0.2 percent, which is practiced in Germany (5 percent of taxable income or 0.2 percent of proceeds), Finland, and Portugal. However, this alternative will make sense only if such deductions can be waived until the next tax period. If a business doesn’t have taxable income in the accounting year when a donation was made, such income may come one year later. As far as in-kind donations are concerned, there are a few issues that need to be considered for businessmen to develop some interest in charity activities. In-kind donations can be services (i.e. office rent or legal consultations), transfer of securities, old equipment, floating funds (goods), land, property, items of historic, artistic, or cultural value, transfer of copyright, etc. Internationally, the amount of charity deductions is normally higher for physical entities with an average of 10 to 15 percent. Unlike legal entities, natural persons enjoy more freedom when it comes to spending their income. However, there are a few difficulties when dealing with donations from physical entities. Firstly, this benefit is, as a rule, enjoyed by very few individuals who fill in income statements. Those receiving salaries from employers are not able to use it, since there is a lack of clear mechanisms in the legislation. Secondly, what we have seen demonstrates that only people with a high level of income are interested in this benefit, whose income comes not from salaries, but mostly from interests. However, they find it difficult to use the benefit because of a lack of clear legislative mechanisms. Single tax or simplified taxation regime for NPOs Only small-sized enterprises (individual entrepreneurs and small companies whose annual income is less than 3 million KGS) enjoy a simplified tax regime in Kyrgyzstan at the moment 4 . The law envisages a single tax for small-sized enterprise paid instead of the following: – income tax; – deductions to the Emergency Prevention and Elimination Fund; – road tax; – paid service tax and retail sales tax. It may be advised to let NPOs enjoy a similar regime, allowing them to choose between the standard and simplified tax regimes when implementing their business activities. This approach is common in the international arena, and is widely practiced in the Russian Federation. If NPOs obtain the right to use a simplified tax regime, they will be more involved in economic activities, for the most part providing different services to the public. Currently, NPOs are reluctant to deal with any business activities, since any income resulting from such activities is taxed heavily. Conclusion To sum up, we can say that there are significant drawbacks in the area of legal financing of NPOs in Kyrgyzstan, which are as follows: (1) the existing Tax Code is not conducive in terms of allowing NPOs to receive income from business activities, 4 Kyrgyz Law “On Simplified Taxation System for Small-sized Enterprise” as of December 7, 2001, Ref. No. 102. 74
and (2) the Law on Charity doesn’t allow for charitable institutions, which makes the benefits and incentives for physical and legal entities making donations to charitable organizations useless. As a result of these drawbacks, NPOs do not receive any financing inside the state. Currently, there tax reform is going on in Kyrgyzstan. The Parliament developed and adopted, at the first reading, a new draft Tax Code. In the fall of 2008, the draft law will be reviewed by parliamentarians at the second reading. This is when the Parliament will consider proposals from the public and organization. To remove the aforementioned drawbacks in the Tax Code related to taxation of NPOs, the International Center for Nonfor-Profit Law has, based on international taxation practices among NPOs, developed its recommendations and submitted them to the Parliament (see Appendix). To make the recommendations easier to discuss in the Parliament, they were presented as a draft Parliament resolution on amending the new Tax Code. Also, we would advise other NGOs in Kyrgyzstan to be more active in analyzing, discussing and lobbying the amendments to the new draft Tax Code of the Kyrgyz Republic. This will help improve taxation among non-for-profit organizations. 75
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Social Research Center American Uni
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The Social Research Center (SRC) at
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What needs to be studied is whether
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policy, but on the politics of loya
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them set up with the sole aim of ac
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has been made. As democratization i
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For a country where the main active
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seemingly happen to form regionally
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• Support the development of self
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synonymous with civil society. Thes
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and to the fact that it is popularl
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Page 25 and 26: Galina Plakhotnikova, Aida Kurbanov
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Page 31 and 32: Sheradil Baktygulov, Independent Ex
Page 33 and 34: By having good knowledge and unders
Page 35 and 36: In this context, the Kyrgyz state v
Page 37 and 38: 6. Produce a training program for g
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Page 41 and 42: 200. This means that about USD 20 m
Page 43 and 44: New Middle Classes Classes are anta
Page 45 and 46: References and Sources 1. Bates R.
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Page 49 and 50: Kyrgyzstan, they did not have a cle
Page 51 and 52: impossible. Even though the Moldova
Page 53 and 54: Summing up, it should be emphasized
Page 55 and 56: 24. Romedi Arkvint’s Speech//Kiev
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Page 59 and 60: awareness of implementation of thes
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Page 73: membership fees, donations, grants)
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Page 83 and 84: Kanykey Jailobaeva, PhD Candidate a
Page 85 and 86: NGOs to involve the government and
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Page 89 and 90: His advice on the legislative basis
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Page 97 and 98: Some believe and argue that Kyrgyz
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Page 113 and 114: Global Donor Platform for Rural Dev
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Page 119 and 120: Nurdin Tynaev, Director of the Publ
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Page 123 and 124: Recommendations • Improve the imm
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In Kyrgyzstan, there are the Spirit
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Following are some examples of mode
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Timur Kozukulov, Senior lecturer, r
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2. These problems are also typical
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Shakhnoza Madaeva, Candidate of phi
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women). About 50 percent of student
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3. International institutions and i
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present this image of woman as an i
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you from a single person created of
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standpoint of such an approach, one
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Types and scale of judicial corrupt
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The evidence demonstrates that the
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other indirect features of judicial
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albeit very unlikely. However, many
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Many factors contribute to this cor
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also collapsed, and the academic co
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To university students: 1. To chang
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protectionism, unfair competition,
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authority to levy tax backlogs with
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Kubanychbek Omuraliev, Independent
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On the subject of barriers, it is a
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and other similar is ten times grea
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participation in economic activitie
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• adopt laws that recognize and p
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Emil Nasritdinov. Discrimination of
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