According to the draft, government bodies will have the right to set prices for goods and services for a period of up to 90 days within a year, with the possibility of extension, for:
- socially significant goods and services, the list of which is determined by the Cabinet of Ministers;
- services of dominant enterprises.
The IBC considers these amendments excessive and unfavorable.
Threat to Investments
According to the IBC, limiting profitability to 25% will make the country less attractive to investors, especially in capital-intensive sectors such as telecommunications, construction, and energy. High-tech companies require a larger margin for return on investment and growth.
Risks for the Telecommunications Sector
Major mobile operators may be threatened by price regulation. This contradicts the digitalization strategy and may negatively affect the quality of services provided and the implementation of new technologies.
Constitutional and Strategic Contradictions
The proposed changes may violate Article 41 of the Constitution, which guarantees economic freedom, and also contradict the National Development Program until 2030, which envisages reducing state intervention in business.
Administrative Risks
The new mechanism will allow the government to add any services to the list of regulated services with virtually no restrictions. This will create legal uncertainty and increase the likelihood of arbitrary decisions.
"We believe that the approach aimed at returning to direct state regulation, especially concerning dominant companies in the mobile communications market, contradicts the fundamental principles of working with dominants," emphasizes the IBC.
IBC Proposals
The business community insists on maintaining the current version of the Law "On Pricing" and against the exclusion of part 5 of Article 6, which prohibits price regulation on other services."It is necessary to abandon the introduction of a maximum profitability of 25%. The development of the country's economy is impossible through administrative intervention and monopolization, and is only possible with the presence of market mechanisms, healthy competition, and predictable regulation," the conclusion states.
The IBC calls on the government and the Jogorku Kenesh to consider the business community's opinion before the final adoption of the bill.
