Page 13 - bne_Tech_03_2020

Investment
March 2020 www.intellinews.com I Page 13
World Bank approves $35mn project to modernise Kyrgyz tax administration and statistical system
The World Bank has approved a project to modernise Kyrgyzstan’s tax administration and its statistical system. The project will receive funding worth $35mn from the International Development Association (IDA), including
a $17.5mn concessional loan and a $17.5mn grant, the World Bank said.
Due to weak tax administration, the burden
of taxation rests disproportionately on a
small number of formal firms, which, in turn, incentivises informality, it added. According to the 2020 Doing Business report, Kyrgyzstan made paying taxes easier by implementing an online platform for filing and paying taxes, but tax compliance costs have remained high – significantly above the average for Europe and Central Asia (ECA) region and OECD countries.
The project has two focus areas. The first is the improvement of tax collection effectiveness while making it easier for firms and citizens to pay their taxes. The second focus area will help fill key data gaps, modernise data collection, storage, dissemination, and ultimately improve evidence- based policymaking.
The project will involve creating a taxpayer-friendly tax administration system that provides high
quality online services. That will include financing modernisation of the tax administration IT system, including significant enhancements in software and hardware. It will also improve information exchange with entities via the existing Kyrgyz interagency information exchange system, Tunduk.
The funding will help enhance human resources capacity in statistics along with modernisation of the statistical and IT infrastructure. It will introduce the usage of international standards and methodologies to improve international comparability of Kyrgyz statistics.
“An effective, transparent and credible tax administration system will reduce the share of the shadow economy, and the country will have more internal resources for social and economic projects,” said Bolormaa Amgaabazar, the World Bank country manager in Kyrgyzstan.
“Statistics are essential in monitoring the achievement of the goals of poverty reduction
and shared prosperity,” Bolormaa Amgaabazar noted in reference to the second focus on the project. “With more accurate and timely statistical information the policy-makers could make better- informed decisions and ensure more efficient allocation of resources.”