Bishkek, Mar.2, 2020. /Kabar/. The Ministry of Economy of Kyrgyzstan responded to Kazakhstan's complaint to the Eurasian Economic Union (EAEU) and the World Trade Organization (WTO), the press service of the ministry reported on Monday.
"After the accession of the Kyrgyz Republic to the EAEU and the removal of customs control at the Kyrgyz-Kazakh border, the facts of unrecorded bringing of goods into the territory of the Kyrgyz Republic without appropriate documents and payment of taxes, or reflecting inaccurate data with underestimation of the price and volume of imported goods, which has a significant impact on the strategic and economic security of the Kyrgyz Republic, increased many times.
The mentioned facts of violation of import of goods on the territory of the Kyrgyz Republic became one of the reasons for the necessity to adopt respective normative and legal acts, providing for measures on strengthening control over payment of indirect taxes.
A minimum level of control prices was introduced solely for the purpose of determining the taxable base when facts of undervaluation of goods or lack of confirmation of the actual value of imported goods were identified.
According to Appendix No. 18 to the EAEU Treaty ("Protocol on the Procedure for Collection of Indirect Taxes and the Mechanism for Controlling Their Payments on Export and Import of Goods, Performance of Works and Provision of Services"), an EAEU member state is fully entitled to apply price determination mechanisms for full payment of VAT.
This right is enshrined in Clause 18 of the above Protocol.
At the same time, it should be noted that this issue has already been considered at the EAEU platform and it has been determined that this mechanism is legitimate, but at the same time, the Kyrgyz Republic has been notified of the discriminatory approach in the application of this mechanism, therefore, there is need to bring national legislation into compliance with the Union law.
In this connection, the Ministry of Economy has prepared a draft Law on introducing amendments to the Tax Code of the Kyrgyz Republic, which indicates the extension of this mechanism to domestic producers. This draft law is under consideration by the Jogorku Kenesh (Kyrgyz Parliament).
As for the notification to the WTO, at present, the WTO system does not observe any complaint from the Republic of Kazakhstan against the actions of the Kyrgyz Republic.
Nevertheless, the Kyrgyz Republic is ready to hold consultations with Kazakhstan on its complaint, if any, and to discuss this process at the WTO working committees".
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