Prime Minister Nikolay Tanaev stated that it is time to transition to the “civilized way” of trading, reasoning that with Kyrgyzstan’s entry into the WTO, the protection of consumer rights is necessary. He considered the protests a sign of the unwillingness of entrepreneurs to pay taxes. Later he justified himself with the argument that subordinate authorities misinterpreted the assigned task and failed to accomplish it. Mr. Tanaev implied that he wanted to check whether the introduction of such system was possible and to make an experiment on one of the markets of Kyrgyzstan.

Almaz, a local manufacturer and seller of men’s suits, said “it is ultimately the choice of customers where to buy products. Anybody has a right to purchase goods in places where cash registers are installed and checks are provided. I think protecting consumer rights does not mean the installation of cash registers in every stall on the markets”.

It is important to mention that entrepreneurs had been paying fixed sums of money to the state budget as taxes and there were no protests on the “patent” system of taxation previously, which was introduced with the approval of the first Tax Code in 1996 and gradually improved to the present day. The system is simple, effective and excluded any inspections by fiscal authorities. Anatoliy Novikov, chief of the Dordoi trade union organization and lobby group, thinks that state authorities had not even managed to consolidate the patent system before trying to transfer to a radically new system. “If the decree will be executed, then fiscal authorities will regularly visit their stalls, and because they know the legislation better, find violations, and get bribes not to close the stalls for detailed inspection. Certainly, all the expenses related to the registration and service of cash registers and bribes to officials will be shown on the prices for goods, which will increase”.

Bazaars represent a major trading form, where both customers and sellers can bargain over prices and the terms of selling commodities. Bazaars represent places where most of the service enterprises of Kyrgyzstan purchase initial goods and then sell or resell finished products. “The installment of cash registers implies that we have to sell goods only to a set price and could not sell it lower than our costs”, Mr. Novikov claims. ”But the market rules are different. We sometimes forced to sell it at very low prices just to get rid of these products and go to other countries to purchase new goods and return back”.

On October 3, Finance Minister Bolotbek Abdyldaev stated that protests had been conducted by “shadowy oligarchs – the stall owners and wholesale – who actively resist the introduction of civilized mechanisms of trading”.

Further Mr. Abdyldaev claimed that Bishkek city markets had previously providing the state budget with 3 million soms as taxes. After the increase of tax collection on bazaars, tax collections reached 8 million soms. However, by their calculations, these figures should be at least ten times higher, which is why the government wants to introduce cash registers.

Entrepreneurs do not share such an optimistic prognosis and recall the case of the gambling taxation decree approved in 1997 and its negative consequences. All casinos had just transferred to the Kazakhstan area with better taxation system, where they continued to develop their business. State authorities did not receive even a cent of taxes after this decree. Dordoi rumors told that a group of Kazakh entrepreneurs after start of the protests had proposed to them transfer their businesses to their area, where Kazakh government had not yet decided to transfer bazaar transactions to a “civilized level”.