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Yahoo! My Yahoo! Mail More Yahoo! Services Account Options New User? Sign Up Sign In Help Yahoo! Search web search Home Singapore Asia Pacific World Business Entertainment Sports Technology Weekend Edition Africa Europe Latin America Middle East North America Kyrgyzstan may slap new tax on US base By LEILA SARALAYEVA and PETER LEONARD,Associated Press - Wednesday, March 2 Send IM Story Print BISHKEK, Kyrgyzstan – Kyrgyzstan may squeeze more money out of a U.S. military air base in the Central Asian country by slapping a tax on aviation fuel supplies. Growing alarm about a grave deficit in the impoverished country's finances has prompted opposition Kyrgyz politicians to seek ways of closing the gap, but U.S. officials are adamant the proposal violates the lease agreement for the base, which supports operations in Afghanistan. The bill goes to parliament for a third and final reading Thursday. Manas Transit Center, which lies adjacent to Kyrgyzstan's main civilian airport outside the capital, Bishkek, serves as a transportation hub for up to 50,000 troops to and from nearby Afghanistan every month. Air tankers at the base also perform around 3,500 missions annually to refuel jets patrolling Afghanistan's skies. The strategic value of the asset has prompted repeated attempts by successive Kyrgyz governments to use the base to prop up the crumbling economy. This time, pressure on the base is coming from opposition parties, which managed to ensure parliament's tentative approval last week for a bill that would mandate a $100 levy on every ton of fuel the Manas base buys. Ata-Meken party deputy Omurbek Abdyrakhmanov, who co-sponsored the bill, suggested the levy could help raise up to $40 million toward increasing teachers' salaries. "The government is against this, but we still think this tax needs to be introduced," Abdyrakhmanov told The Associated Press. The bill goes to parliament for a third and final reading Thursday. If pro-government legislators fail to attend in force, as has happened often in recent weeks, the opposition could just squeeze it through. With aviation fuel needs at Manas slated to reach 390,000 tons this year, the U.S. is reticent to take the hit. Washington has so far staunchly refused to even entertain the idea of the levy. "The exemption from fuel taxes is a vital part of our ability to carry out the mission of the Transit Center," the U.S. Embassy in Kyrgyzstan said in a recent statement. "The U.S. government has similar agreements with many countries throughout the world for fuel to be delivered free of all duties and taxes." Despite apparent U.S firmness over the issue, this would not be the first time Washington has had to relent in the face of Kyrgyz demands for more money. In February 2009, former President Kurmanbek Bakiyev stunned the United States by announcing the closure of Manas, citing an unsatisfactory financial agreement and public opposition to the base. That coincided with a $1.7 billion aid pledge from Russia, which has long bridled at U.S. military presence in what it perceives as part of its sphere of influence. Bakiyev, who has since been deposed in a popular bloody uprising, later went back on his word and agreed to allow the base to remain in place in exchange for a sharp increase in rental payments. Consequently, U.S. contributions to Kyrgyzstan's economy through Manas have increased to $123.6 million in 2010, up from $76.8 million two years earlier. As a result of an agreement signed between the United States and Kyrgyzstan last month, aviation fuel is now supplied to the base by two companies. Half of it comes from nebulous Gibraltar-registered Mina Corp., which was last year subject of a U.S. Congressional investigation over its dealings with Manas, and the remaining fifty percent is supplied by a Kyrgyz-Russian joint venture. Global Insight IHS analyst Lilit Gevorgyan wrote in a note last month that this arrangement could yet change, however. "It is likely that the government will continue to put pressure on the U.S. to gain full rights for fuel supply," Gevorgyan said. Prime Minister Almazbek Atambayev has been openly contemptuous of Mina Corp.'s involvement and has suggested that a Kyrgyz company should take over all fuel deliveries _ a business potentially worth around $600 million. ______ Leonard reported from Almaty, Kazakhstan. 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