The planned changes in tax legislation were discussed with the business community of Pavlodar region by Deputy Minister of Finance Yerzhan Birzhanov, as reported by primeminister.kz.
He reminded that the government is considering raising the VAT rate to 16% to increase budget revenues. This will help maintain the stable condition of the National Fund and finance priority state projects: lending to investors, developing agricultural institutions, covering defense costs, modernizing housing and communal services, enhancing thermal and gas transportation systems, machine engineering, manufacturing industry, as well as water supply and wastewater management.
“In recent years, we have withdrawn funds from the National Fund, even though its primary goal is to invest in the future,” Yerzhan Birzhanov noted.
According to him, the implementation of the reform is expected to result in an increase in tax revenues to the country's budget – 4-5 trillion tenge annually. One of the key innovations will be the opportunity for individuals with an annual income of up to 15 million tenge not to register as individual entrepreneurs. This will allow a large category of self-employed individuals – couriers, taxi drivers, and artisans – to utilize platform employment with aggregators without unnecessary bureaucratic procedures.
“In this regime, a deduction of four percent is anticipated: two for pension contributions, one for medical insurance, and one for social contributions,” explained Yerzhan Birzhanov.
Previously, one percent went towards individual income tax, but now this money will remain with the self-employed as their future pension and social savings. If the income threshold is exceeded, the entrepreneur will be required to switch to VAT payer status.
The Deputy Minister also addressed the concerning issue of potential food price increases due to the increased tax burden. He assured that agricultural products would not be taxed, and retail taxation would remain in its current form. Additionally, the Ministry of Finance is considering reducing ineffective tax benefits and introducing differentiated rates for individual income tax for Kazakhstani citizens with high earnings.
Earlier, Kazakhstan considered raising the VAT rate from 12% to 20%, while intending to reduce the labor cost burden to 30%. Furthermore, Deputy Prime Minister and Minister of National Economy Serik Jumangarin proposed lowering the VAT threshold to 15 million tenge. During a meeting with entrepreneurs on January 28, 2025, President Kassym-Jomart Tokayev stated that any innovations should be based on comprehensive analysis and a well-thought-out strategy, instructing the government to further explore the VAT rate issue.
On February 11, 2025, Serik Jumangarin stated at a government meeting that the value-added tax rate “will be differentiated: 16%, 10%, 0%, and exemption from VAT.” It was also reported that in the construction sector, it is planned to introduce a social infrastructure payment (SIP) instead of VAT.
Prime Minister Olzhas Bektenov instructed to submit the Tax Code draft to the Mazhilis by February 20, 2025.