This week, the business life of the country was mainly related to the activities of government agencies, which deal with attracting external financial support. The Ministry of Finance reported on the funds already received for the budget, as well as on measures to attract new funds. The government announced the creation of more favourable conditions for small business in reporting and tax payments.
Overall, the week was quite tough, as was the situation in the country, which is complicated by the outbreak of number of coronavirus cases. However, there are also positive glimmers - there are no delays in mandatory payments for the country's population, and the number of cases has fallen slightly.
To restore the economy. This week it was announced that the balance of the National Bank account, received from international donors, amounts to $148 million.
According to Deputy Prime Minister Erkin Asrandiyev, most of these funds are the second tranche from the International Monetary Fund (IMF) of $121 million, as well as a grant from the European Union.
"The bulk of these funds is planned to be spent on business support and economic recovery. This is due to the fact that most of these resources from the IMF are provided for a short period of 5 years and we will have to return this money in 3 years after the grace period expires. Therefore, it is more expedient to direct these funds to preferential lending to business to pay off external debt," Asrandiyev said.
Humanitarian aid is coming. Kyrgyzstan will soon receive humanitarian aid worth $9 million.
Deputy PM Erkin Asrandiyev said the republic has already received humanitarian assistance from various international organizations and friendly countries totaling almost $8 million.
In general, money is also allocated from the republican budget for COVID-19 battle, including for purchase of medicines.
Combined budget. Since the beginning of the year, Kyrgyzstan’s shortfalls budget from tax and customs payments have reached KGS 14 billion.
This is due to the closure of borders with China, and in general, the external borders, quarantine measures and the phasing out many businesses, Deputy PM Asrandiyev believes.
"One of the measures on which great hopes are placed is the digitalization of tax procedures, or as it is called fiscalization. Since July 1, electronic invoices, mandatory application of automated accounting system at filling stations and a number of other measures have been introduced. This will contribute to removal from the shadows and more transparent accounting.
Reducing freight traffic. Algorithms at border crossings have been developed for cargo transportation during the global pandemic, and green corridors for the transport of perishables have been established.
According to a statement this week by Kyrgyzstan’s Minister of Transport and Roads Janat Beishenov, despite the measures taken, the volume of traffic since the beginning of the year has decreased by 476 thousand tons, or 30% compared to the same period last year.
"Transportation with China through the Irkeshtam checkpoint has been resumed since Apr.16, while talks on the opening of the Torugart checkpoint are currently underway, opening is expected in the coming days," the minister said.
The Economy Ministry’s matters. This week, Prime Minister of Kyrgyzstan Kubatbek Boronov signed a Resolution of the Government of the Kyrgyz Republic on prolongation until Oct. 1, 2020 of the terms of tax reporting, reporting on social contributions, as well as the report on contributions to development and infrastructure of local importance.
Such a measure was taken in order to prevent the accumulation of citizens in the territorial tax authorities and to minimize the risks and threats of COVID-19 coronavirus infection, as well as in connection with the appeals of the business community.
Spent as intended. During April-May 2020, the republican budget expenditures in the amount of KGS 9 billion 765.8 million were incurred from the funds, provided by the International Monetary Fund (the first tranche).
According to information, released by Deputy Finance Minister Abdybaly tegin Suierkul, the funds were allocated to such items as:
- salaries (including those of doctors, teachers and law enforcement officials), social contributions, transfers to the Social Fund, transfers to the Mandatory Health Insurance Fund (MHIF), equalizing transfers (salaries of local government bodies), social security and social assistance benefits, the purchase of medical goods and services, strategic stocks (for the purchase of grain by the State Material Reserves Fund), and the purchase of food for people who find themselves in a difficult life situation due to the restrictions imposed in order to combat COVID-19.
To support the budget. The Government of the Kyrgyz Republic plans to attract financial resources for budget support in the form of grants and credits at the lowest possible interest rates and for the longest terms in the amount of $506.4 million.
Deputy Finance Minister of the republic Abdybaly tegin Suierkul said of these, $69.6 million is a grant and $436.8 million - a credit, of which $319.2 million has already been received from the International Monetary Fund (IMF) and Asian Development Bank (ADB).
Sponsors' money. Financial resources from the Asian Development Bank in the amount of $50 million, which were provided to support the budget of the Kyrgyz Republic, entered the accounts of the Central Treasury of the Finance Ministry of Kyrgyzstan on June 10 and in som counterpart in the resource part of the budget amounted to KGS 3 billion 743.8 million.
These funds were used to finance socially significant expenditures for the total amount of KGS 3 billion 743.8 million;
In particular:
- KGS 2,859 million were allocated for salaries (including those of doctors, teachers and law enforcement officers);
- KGS 362.2 million – for social contributions;
- KGS 67.6 million – for benefits for social security and social assistance to the population;
- KGS 455.0 million - for MHIF transfers.
New funds attracting. In order to prevent the spread of COVID-19 infection, the Government of the Kyrgyz Republic is attracting investments in the amount of $56.2 million for the implementation of various projects with development partners.
According to the Finance Ministry of the republic, under the World Bank’s “Enhancing Resilience to Natural Disasters” project worth $9 million, the Ministry of Health of the Kyrgyz Republic concluded contracts to the amount of $6.1 million and supplies were made for $2.2 million.
Out of $9 million, $4.5 million is a grant and $4.5 million is a credit. In addition, the WB has signed and ratified an agreement worth $12.15 million as a COVID-19 Emergency Project. Tender procedures are currently being carried out by the Ministry of Health in order to use these funds. Out of $12.15 million, $6,07 is a grant and $6.07 is a credit.
The Islamic and Asian Development Banks will allocate $35 million to fight COVID-19.
"The government is currently in the process of ratifying the $20 million worth of agreements with the Asian Development Bank and the Islamic Development Bank for $15 million. Within the framework of these agreements, medical equipment and drugs to combat COVID-19 will be purchased in the near future," the Ministry of Finance said this week.
Funds for small business. The Government of the Kyrgyz Republic seeks to provide additional liquidity to financial institutions for further lending to the private sector.
Amid coronavirus pandemic, the crisis has severely affected private sector development.
The Ministry of Finance of the Kyrgyz Republic has reached an agreement with the following development partners:
- The World Bank, through its two projects and with the support of the Asian Infrastructure Investment Bank, which will co-finance a private sector support project, has agreed to provide long-term loans in the amount of $122.5 million;
- The European Investment Bank will start the process of financing agricultural value chains and small and medium businesses in the amount of EUR 22 million already in early August.
- Within the revolving fund, the Ministry of Finance reached agreements with donors on the use of about $36 million to support farmers to ensure food security.
Postponement of reporting. By the Resolution of the Government of the Kyrgyz Republic this week, the terms of reporting on taxes and insurance premiums for the second quarter of 2020 and/or for the periods from June 1 to Aug. 31 have been extended to Oct.1 of this year without submitting a written application.
In particular, deadlines for submission following reporting have been extended:
- tax reporting, except for tax reporting on indirect taxes when importing goods on the territory of the Kyrgyz Republic from the territories of the Eurasian Economic Union member states;
- reporting on the state social insurance funds.
By the same Resolution, the term for submission of reporting on contributions to the development and maintenance of local infrastructure has also been extended until Oct. 1.
Kabar News Agency
Comments
Post Comment