The business community of the Abai region was informed about the nuances of the tax reform, as reported by primeminister.kz.
Among the key initiatives are the pre-filling of VAT declarations, the launch of the "e-Tamga" project, which will allow online tracking of the status of tax operations, as well as the automated maintenance of electronic invoices. Currently, more than 1.3 million taxpayers are registered in the system, and the annual number of electronic invoices issued reaches 260 million.
"As the director of the Regional Chamber, a person engaged in the development of entrepreneurship and the protection of business interests, I believe that increasing the VAT rate will not have a positive impact on either businesses or end consumers. VAT is a consumption tax, and any changes to it will inevitably affect prices. It is important to establish a balanced system that takes into account the needs of small businesses and reduces administrative barriers. Simply lowering the VAT threshold without simplifying administration will create additional burdens. There is a need for automation of reporting, the introduction of a cash method of accounting, pre-filled declarations, and other tools that will allow entrepreneurs to operate more efficiently. Furthermore, the tax reform should consider its impact on the investment climate. The high burden on the wage fund is already forcing businesses into the shadows. A revision of the social tax and mandatory pension contributions from employers will help reduce indirect costs, bring companies out of the informal sector, and create new jobs. We continue to engage in dialogue with government agencies to ensure that final decisions strike a balance between fiscal objectives and the development of entrepreneurship. The reform should not only replenish the budget but also create conditions for long-term economic growth, business development, and increased transparency of the tax system," noted the director of the Abai region's Chamber of Entrepreneurs, Maksat Suichinov.
There are about 60,000 business entities operating in the region, of which approximately 70% are individual entrepreneurs.
"The total number of taxpayers in Kazakhstan exceeds 2 million. Only 80,000 of them pay value-added tax. The threshold currently stands at around 80 million tenge, and it is proposed to reduce it to 15 million tenge. This issue is open for discussion, as it could encompass a significant number of taxpayers – according to our estimates, an additional 200,000 to 300,000 entrepreneurs would be included. I want to state clearly that those taxpayers who directly serve the public will be classified under a special tax regime. This means that neighborhood stores, hairdressers, and small clothing boutiques that have been operating under a simplified regime or retail tax will be exempt from VAT," emphasized Deputy Finance Minister Yerzhan Birzhanov.
The Deputy Minister explained how the special tax regime and retail tax will be transformed.
"Currently, the existing simplified declaration system allows for an annual income of up to 180 million tenge, with a workforce of up to 30 people and a rate of 2%. There was also a formal retail tax that covered businesses with a turnover of up to 2.4 billion tenge per year, without restrictions on the number of employees, and it was possible to halve the 4% rate by decision of the maslikhat. Now we are merging these two regimes into a single format of the simplified declaration, while maintaining the upper income limit, which will be nearly 2.4 billion tenge," reported Yerzhan Birzhanov.
It was previously reported that the proposed reform to abolish the social tax and mandatory pension contributions by entrepreneurs could occur on the condition of raising the VAT rate to 20%. This would provide the state with revenues to cover social contributions instead of the employer. However, with the currently proposed VAT rate of 16%, it is suggested that social contributions remain unchanged.
The Ministry of Finance is also considering the reduction of ineffective tax benefits and the differentiation of individual income tax depending on the incomes of individuals.
Kazakhstan has been discussing the possibility of increasing the VAT rate from 12% to 20%, while also intending to reduce the burden on the wage fund to 30%. Additionally, Deputy Prime Minister and Minister of National Economy Serik Zhumangarin 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 and instructed the government to further explore the VAT rate issue.
On February 11, 2025, Serik Zhumangarin 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, a social infrastructure payment (SIP) is planned to be introduced instead of VAT.
Prime Minister Olzhas Bektenov instructed to submit the Tax Code draft to the Mazhilis by February 20, 2025.