On Saturday, February 1, Deputy Prime Minister and Minister of National Economy Serik Jumangarin and Minister of Finance Madi Takiev commented on the proposed tax reform during a meeting with journalists. It is worth noting that discussions are currently underway regarding increasing the value-added tax (VAT) rate to 20% and lowering the threshold for VAT registration to 15 million tenge.
Serik Jumangarin mentioned that the possibility of VAT exemptions for certain enterprises is being considered. For instance, the agricultural sector may be exempt from VAT. For food producers, three options are being discussed: maintaining the rate at 12%, reducing it to 5%, or complete VAT exemption. The pharmaceutical sector may also see VAT reduced to 5%. In the housing construction sector, instead of VAT, an infrastructure fee is being proposed.
"Most likely, we will introduce an infrastructure fee that the construction company will pay. Currently, it ranges from $40 to $60 per square meter, depending on the infrastructure fee. We won’t create new taxes. We are discussing these matters based on the class of housing," Serik Jumangarin stated.
He noted that the proposal to replace VAT with an infrastructure fee was put forth by businesspeople.
"This is a good proposal. It is currently under discussion. There will be no situation where VAT remains and there are also fees. It may be that this tax has a zero rate along with the infrastructure fee. Alternatively, VAT might be reduced. However, we will not reach the level of 20% that we are aiming for," said the Deputy Prime Minister.

Regarding the reduction of the VAT threshold, Serik Jumangarin stated that various options are being discussed, but the most probable level remains the previously announced 15 million tenge. Additionally, the number of companies eligible for the retail tax will be significantly reduced.

It is important to note that if an entrepreneur can no longer apply this preferential regime, they will have to pay corporate income tax (CIT) in addition to VAT (if the threshold is exceeded). This means that the tax burden for many will increase from 2-8% (retail tax) to 40% (proposed VAT and CIT rate).
As reported, there are also plans to reduce the burden on the wage fund (WF).


"When I am told 'you must find other sources of budget replenishment, you must engage in tax administration, you must bring things out of the shadows, and so on,' we are doing this. Last year, we brought 1.3 trillion tenge out of the shadows. Let’s say we bring another 2 trillion tenge out of the shadows this year, thanks to tax administration, another 1 trillion, but that still won’t be enough. First and foremost, we need to address the budget issue. This is the essence of the reform," emphasized Serik Jumangarin.
In particular, strengthening tax administration includes:
- tightening the process of opening individual entrepreneurs (IE) and limited liability partnerships (LLP)
- forced closure of inactive legal entities (to prevent resale)
- mobile customs groups
- disclosure of banking secrecy in certain areas
- expanding the control functions of tax authorities (cancellation of prosecutor's oversight over tax audits).
Serik Jumangarin believes that after the tax and budget reform, "we will not plunge into runaway inflation," and the effect of additional inflation will be short-term. At the same time, it is expected that annual additional budget revenues will amount to between 5 trillion and 7 trillion tenge.
"Our own revenues amount to 15.6 trillion tenge in total, while we spend 25.8 trillion. Where do we get 10 trillion? This cannot be closed with tax administration or other measures. This indicates that we need to increase revenues. We borrow 5.8 trillion, and essentially all borrowing comes from the National Fund. This is a concerning situation. If we continue to borrow in this manner, at some point, the condition of the National Fund will sharply deteriorate. However, this fund was not created for us; it was created for future generations, and the 'National Fund for Children' program was a response to these issues. We borrow 4.1 trillion from the market. Mainly, the Ministry of Finance issues securities that financial institutions purchase," said Serik Jumangarin.
He reminded that a strict budget rule is being introduced, which limits transfers from the National Fund. This will allow the volume of the National Fund to reach the target indicator of 100 billion dollars by 2029.

At the same time, Serik Jumangarin emphasized that it is necessary to increase the development budget in the country.
"The development budget for 2025 is only 8%. Of the total expenditure of 25.8 trillion, the development budget is only 2 trillion. Next year it will be even less – 6%, which is 1 trillion 400 billion," said the Deputy Prime Minister.
He emphasized that the proposed reform will also allow for an increase in the development budget. "The development budget defines the future of the country; it should be increased to 20%," added Serik Jumangarin.