Kyrgyzstan Aims to Strip Canadian Gold Firm of Tax Status

Kyrgyzstan’s cash-strapped government wants to renegotiate its agreement with its largest foreign investor, Toronto-based Centerra Gold, and to end the company’s privileged tax regime, Economics Minister Temir Sariyev said Monday. His comments came after the Kyrgyz Cabinet of Ministers approved recommendations by a state commission on Friday to cancel Centerra’s existing contract for the high-altitude Kumtor gold mine and charge the company higher taxes. “Taxes must be paid on the basis of the country’s tax code rather than some other agreements. The existing agreement signed in 2009 stipulates special terms of operation and tax payments for Kumtor,” Sariyev said. Centerra currently pays a 13 percent tax on its gross revenue and another 1 percent into a special fund for the development of the Issyk Kul Region, where Kumtor is based. The minister said other enterprises pay 17-20 percent and are demanding comparable terms. Centerra’s management has said it may turn to international arbitration if the Kyrgyz government refuses to honor existing legal guarantees.

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