Business Environment Improvement (BEI) Project in Kyrgyzstan

PMCG implemented the BEI project in Kyrgyzstan, sponsored by USAID, in order to improve the business environment by concentrating on tax reforms to increase stability and predictability in tax policy, decrease tax burdens, and simplify and remove bureaucratic barriers in the tax system.

The goal of the USAID BEI Project was to promote entrepreneurship and economic development by reducing the legal, regulatory, and administrative burden for SMEs by working with government to streamline legal and regulatory processes and facilitate informed and effective dialogue between the private and public sectors. Constructive, multi-party engagement in the reform process resulted in better SME policies, deregulation at the local, national and regional level, proper implementation of laws and regulations and stronger business associations, led to an improved business environment for SMEs and to more diversified economic growth.

In accordance with the USAID BEI work plan and with the agreement of the Government of Kyrgyzstan, BEI contracted PMCG to provide consulting services in tax policy and tax administration. BEI identified PMCG’s Chairman of the Supervisory board, Mr. Aleksi Aleksishvili as most suited to provide expert consultation on several work products regarding analysis of tax policy and tax administration issues, improvements to tax legislation and other recommendations for improving the World Bank Doing Business (WBDB) Paying Taxes indicator.

PMCG provided following services:

• Inventory of all tax administration procedures, NLAs and provisions of the latest Tax Code of Kyrgyzstan affecting the “Paying Taxes” indicator, including, but not limited to, tax inspections, risk assessment system implementation, one-stop-shop business registration, and tax contracts;
• Presentation on international best practice (Western Countries, CIS reformers, and Georgia in particular) in areas related to the WBDB Paying Taxes indicator, with specific recommendations on applicability and implementation of duplicate reforms in the Kyrgyz Republic;
• Recommendations on amendments to the Tax Code of Kyrgyzstan based on the best international practice and improvements indicated by WBDB methodology for the Paying Taxes indicator, and for improving sections on application for a tax contract;
• Action plan with recommendations on tax inspections, risk assessment system implementation, and one-stop-shop business registration at the district level.