Kyrgyzstan Weighs Higher Sugary Drink Taxes as Child Health Concerns Rise

Kyrgyzstan is considering higher taxes on sugar-sweetened beverages, including a new sugar-content-based excise system, as officials seek to curb rising rates of obesity, diabetes, and cardiovascular disease among children and adolescents. On May 26, the Kyrgyz Ministry of Health organized a high-level policy dialogue on the taxation of sugary drinks as part of the country’s strategy to prevent noncommunicable diseases and promote healthier diets. According to the ministry, noncommunicable diseases, including cardiovascular illnesses, cancer, and diabetes, remain the leading cause of premature deaths in Kyrgyzstan. Excessive consumption of sugary beverages is increasingly recognized as a major risk factor for obesity and diabetes, especially among younger age groups. The proposal would replace the current flat excise rate with a tiered system in which drinks with higher sugar content are taxed more heavily. The Ministry of Health has also proposed a separate excise tax on energy drinks, citing their sugar and caffeine content and potential risks for adolescents. The policy discussion brought together representatives of the Ministry of Health, parliament, international development organizations, civil society groups, and public health experts to review international experience, economic evidence, and possible approaches to taxing sugary beverages. According to the World Health Organization, more than 115 countries worldwide, including 22 countries in the WHO European Region, have already implemented various forms of taxation on sugar-sweetened beverages as part of efforts to improve public nutrition and reduce the health and economic burden caused by chronic diseases. International studies show that increasing the price of sugary drinks can reduce consumption and encourage healthier dietary habits. “Today, we are facing a significant increase in diabetes, obesity, and cardiovascular diseases, and the situation among children and adolescents is particularly alarming,” Deputy Health Minister Gulbara Ishenapysova said during the dialogue. “Sugar-sweetened beverages form unhealthy eating habits from an early age while providing no nutritional value. The state already incurs enormous costs for treating complications of diabetes, including hemodialysis, heart attacks, strokes, amputations, and disability.” According to Ishenapysova, increasing taxes on sugary drinks should be viewed “first and foremost as an investment in public health and the prevention of chronic diseases.” WHO Representative to Kyrgyzstan, Dr. Liviu Vedrasco, said the taxation of sugary beverages is not only a health policy measure but also an investment in the country’s future productivity and economic resilience. “International experience convincingly demonstrates that well-designed fiscal policy helps reduce sugar consumption, encourages producers to manufacture healthier products, and helps prevent noncommunicable diseases, especially among children and adolescents,” Vedrasco said. UNICEF Representative in Kyrgyzstan, Samman Thapa, warned that the situation in the country is becoming increasingly concerning. “According to the 2023 Multiple Indicator Cluster Survey, 78% of children aged six to 23 months already consume sugary beverages,” Thapa said. “At the same time, the rate of overweight and obesity among children continues to rise.” The World Bank backed the proposal, citing modeling that projected long-term health and fiscal benefits. “Our analysis of the Kyrgyz Republic shows that there are practical measures capable of delivering significant benefits for both public...

Kazakh MPs Propose Differentiated Taxation for Medicines and Healthcare

Kazakh lawmakers are pushing for a differentiated tax policy on medicines and healthcare services to maintain their affordability amid upcoming tax reforms. Askhat Aimagambetov, a deputy of the Mazhilis (Kazakhstan’s lower house of parliament), has proposed exempting certain essential medicines from value-added tax (VAT) and reducing the tax burden on medical institutions. Proposed VAT Adjustments Kazakhstan is currently debating a new Tax Code that would increase the VAT rate from 12% to 16%, while introducing zero and reduced rates for specific industries. Aimagambetov, writing on social media, noted that a group of Mazhilis deputies had repeatedly advocated for differentiated taxation of medicines and medical services even before discussions on the VAT hike began. He stressed that applying the full 16% VAT rate to all medical services and pharmaceuticals would lead to a sharp rise in costs and reduce access to healthcare for the population. Tax Exemptions for Essential Medicines To mitigate this impact, lawmakers propose VAT exemptions for drugs treating socially significant diseases such as: Cancer Rare diseases Palliative care Diabetes Autoimmune diseases “The specific list is still under discussion and will be expanded,” Aimagambetov stated. “This measure will prevent a sharp increase in drug prices for those who need them most, socially vulnerable groups.” For other medicines, a reduced VAT rate of 10% is under consideration. Impact on Medical Services Currently, medical services in Kazakhstan are not subject to VAT. However, under the new Tax Code, the government proposes introducing a 10% VAT rate. Aimagambetov and his colleagues initially suggested reducing this to 5%, but discussions are now focused on exempting certain socially significant medical services from VAT entirely. These include: Oncology treatments Palliative care (hospices) Stroke treatment Potentially obstetrics and other critical medical services For other medical services, a 10% VAT rate may be introduced. Changes to Corporate Tax in Healthcare In addition to VAT adjustments, the government plans to raise the corporate income tax for medical institutions. Currently, this sector benefits from a zero-tax rate, but under the proposed reforms, a 10% corporate tax would be applied. Consultations with Businesses Ongoing As previously reported by The Times of Central Asia, the government plans to finalize the list of industries eligible for the 10% VAT rate following consultations with the business community.