The draft law stipulates that the state will be able to introduce state price regulation for a period of up to 90 calendar days per year, with the possibility of extension, for:
- socially significant goods (works, services) for both economic entities and individuals, the list of which will be determined by the government;
- socially significant goods (works, services) from dominant economic entities.
The IBC characterized the proposed amendments as excessive and potentially dangerous.
Threat to InvestmentsThe Council emphasizes that limiting profitability to 25% will make the country less attractive to investors, especially in capital-intensive sectors such as telecommunications, energy, and construction. High-tech businesses require higher margins for the return on investments and further development.
Risks for the Telecommunications MarketPrice regulation may affect mobile operators, which contradicts the country's digitalization strategy and could negatively impact service quality and slow down the implementation of new technologies.
Incompatibility with the Constitution and Development StrategyThe planned changes violate Article 41 of the Constitution regarding economic freedom and contradict the National Development Program until 2030, which aims to reduce government intervention in business.
Administrative RisksThe introduction of a new mechanism will allow the government to include any services in the list of regulated services with virtually no restrictions, creating legal uncertainty and opening opportunities for arbitrary decisions.
"We believe that the state approach aimed at unjustifiably reviving direct regulation methods concerning dominant players, especially in the mobile communications sector, contradicts the fundamental principles of working with dominants," noted the IBC.
IBC Proposals
The business community calls for maintaining the current version of the Law "On Pricing" and not abolishing 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%. Economic development is impossible without preserving market mechanisms, a competitive environment, and predictable regulation," the conclusion emphasizes.
The IBC urged the government and the Jogorku Kenesh to consider the business community's opinion before the final adoption of the law.
