Assessment of Tax Compliance Costs in the Kyrgyz Republic

The World Bank is providing technical assistance (TA) to the Kyrgyz Republic's State Tax Service (STS) in support of its efforts to modernize and fully digitalize the state tax system. This TA is funded by a grant from the Switzerland State Secretarial for Economic Affairs (SECO) single-donor trust fund through the Global Tax Program.

As a part of this this TA, the World Bank commissioned the two latest waves of the Tax Compliance Cost Survey (TCCS). These surveys were a continuation of earlier work funded by the International Finance Corporation (IFC) in support of evidence-based policymaking and effective governance ensuring decisions are guided by reliable data.

The results of the current and previous rounds of the TCCS were summarized in a presentation delivered by a World Bank team in Bishkek on April 4, 2025, to an audience that included representatives from the government, business associations, think tanks, and the international development community based in Bishkek.

This presentation highlighted encouraging results from STS regarding on-going digitalization of tax administration and government efforts to simplify tax compliance. It also confirmed that while the New Tax Code was instrumental in bringing businesses out of the gray economy, it also added to these firms' compliance burden, for which they were not well prepared. Moreover, the TCCS results connected frequent regulatory changes and rushed modernization efforts of recent years to an overall increase tax compliance cost.

While these increases may be partially attributed to learning curve for businesses as well as STS, bringing tax compliance costs down further will require continued simplification of tax compliance processes, especially for small businesses (turnover up to KGS 8 million) for which the estimated average tax compliance cost was 3.7% of turnover in 2023.

The next round of TCCS is planned for 2026 and will collect information for FY 2025.

Download the presentation:

Assessment of Tax Compliance Costs

English version | Russian version

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