Kyrgyzstan, located in central Asia, is rich in metals, particularly copper and gold. Unfortunately, the country’s government has failed to achieve reasonable benefit from metals enterprises operating within it. Due to a lack of government oversight and widespread corruption, Kyrgyzstan has not collected adequate tax revenues consummate with high levels of mining profit. This situation will soon change, as the government has recently signed into law new measures to increase tax revenues and battle corruption.
Failure to build mines on properties purchased for the purpose has been practiced by buyers who hope to sell the land for higher premiums. Avoidance of capital investment and tax evasion are other activities resulting in loss of government revenues. Participation in these corrupt activities by government and local officials is not unusual.
The new laws will prohibit granting of mining licenses, except through auction. Additionally, severe fines will be levied against owners who fail to begin production, and mining license sales will be prohibited to third parties.