Limitation of Cash Payments as a Guarantee of Tax Transparency (on the Example of the Kyrgyz Republic)

The subject of the study is the possibility to limit cash settlement in certain areas of business on the example of the Kyrgyz Republic. The purpose of the study is to summarize the best practices aimed at solving the problem of reducing the level of tax evasion using cash settlements. Cash settlements carry the greatest risks of tax evasion due to the complexity of controlling such cash flows, unlike cashless settlements, which, despite their disadvantages and gray areas, are not only much more transparent, but also subject to control, and therefore treatment (up to blocking).

Due to the lack of practical and theoretical research by scientists in the field of legal regulation of revenue accounting control, in addition to improving the tools of tax administration in the Kyrgyz Republic, the authors propose and justify the need to increase the share of cashless settlements by prohibiting payments in cash for an amount exceeding the threshold.

The proposed changes to the regulatory framework correspond to both the best practices typical of foreign experience and the specifics of the business environment in the Kyrgyz Republic.

The article concludes that the result of the implementation of the proposed directions will be the whitewashing of the sphere of settlements, since the latter will be carried out through the country’s payment system, which will simplify the control of cash flows and, consequently, the formation of the taxpayer’s tax base.

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