Prime Minister Olzhas Bektenov discussed tax reform issues with experts and business representatives, as reported by Primeminister.kz .
The head of the government noted that as part of the implementation of the President's instructions, the proposed measures are actively discussed with the broader public, especially with the business community and experts. Working groups led by vice ministers of national economy and finance met with entrepreneurs from nearly all regions, gathering proposals for analysis and processing.
The Ministry of National Economy briefly presented the main approaches to tax and budget reform. A differentiated VAT and a reduction of the registration threshold will help decrease dependence on the National Fund and direct additional funds towards infrastructure development. Furthermore, it is proposed to reduce the number of special tax regimes from 364 types of activities to 40. It was noted that the current revenue level in Kazakhstan is about 20%, which is the share of GDP from revenues. In comparison, this figure is around 42% in Russia and over 50% in developed countries. Thus, there is a significant shortfall of budget resources for financing state programs. According to the Ministry of National Economy of the Republic of Kazakhstan, without reforms, the National Fund, given its current usage dynamics, will be depleted to a minimum by 2035-2036.
“There are many questions regarding administration. Here, too, we are not standing still; we are working. There are certain successes. We are also actively working on the revenue side of the budget. In January, we reached 150% of the revenue plan. These are all results of our work and digitalization in the area of state revenues,” emphasized Olzhas Bektenov.
The government is working on creating a unified digital ecosystem that will enhance operational efficiency and simplify business interactions with the state. Artificial intelligence and automated data analysis are being implemented, which will reduce administrative burdens and increase transparency. Technologies for processing big data are actively being introduced to improve tax administration efficiency.
Meeting participants were introduced to the Finance Ministry's big data analysis system, which has integrated 55 state databases, and this number is expected to reach 100 by the end of the year. Based on this information, digital profiles of taxpayers are being formed. Currently, 569,000 profiles of legal entities and over 1.8 million profiles of individual entrepreneurs have been created. Digitalization allows for comprehensive data collection on taxpayers, including payroll funds, the number of temporary workers, taxation objects, real estate information, vehicles, and other data.
The leadership of the Finance Ministry presented specific projects from the State Revenue Committee, emphasizing the implemented digital solutions and their effectiveness. Work is underway on biometric identification in the electronic invoice system (EIS) for high-risk taxpayers. Today, 101 online trading platforms, including Temu, Pinduoduo, and Alibaba Group, have been registered for tax purposes. In 2024, they are expected to pay 175 billion tenge in taxes, including VAT and taxes for foreign companies engaged in electronic commerce with individuals in Kazakhstan.
As part of the tax reform, it is proposed to strengthen control over the registration of LLPs and individual entrepreneurs to eliminate fictitious transactions. Measures for identifying entrepreneurs through Face ID are being considered. Additionally, information will be verified to minimize the risks of registration under false identities. In 2024, over 1,000 such companies have already been identified. Another initiative is to prohibit the registration of new companies if the founder already has an inactive enterprise, has tax debts, or has committed serious tax violations.
Control and cash registers are a separate tool for digitizing the financial sector. In 2024, 39% of control and cash registers (453,000 units) did not issue receipts. A number of measures are being developed in this direction.
An important step in tax administration, considering the growing number of citizens working on various internet platforms, was the regulation of platform employment.
For instance, within the framework of the pilot project for tax administration of platform employment, “Yandex Taxi” transferred 378 million tenge in income tax for drivers and approximately one billion tenge in social payments starting from September 2024. Thus, taxes are paid directly to the budget without additional procedural burdens. By the end of the first quarter of the current year, the Finance Ministry plans to expand the project to over 30 platforms.
During the meeting, experts actively expressed their opinions on the proposed reform project.
7 Former chairman of the public social fund “Qazaqstan Khalqyyna,” PhD in Economics Bolat Zhamishev supported the reduction of the VAT registration threshold to 15 million.
“I believe that the lower limit of 15 million should definitely be maintained. There will undoubtedly be pressure to raise this threshold. I think that this is a red line because businesses will start to split. There are more incentives for splitting when tax rates are increased,” said Bolat Zhamishev.
At the same time, he noted that businesses might face difficulties with the administration of accounting services. In this regard, it was suggested to additionally consider approaches to violations that may arise during the introduction of reforms due to a lack of knowledge of the process.
8 Independent director and board member of JSC “SPK Almaty” Abai Sarkulov stated that to reduce the budget deficit, it is proposed to refrain from withdrawals from the National Fund in favor of reforms.
“Within the framework of the existing tax legislation, I would like to note a plus. Taxes are collected very professionally. This is thanks to digitalization. Another significant plus is that there are effective measures for collecting debts owed to the budget. Regarding the reform itself, the task is clear: there is a deficit in the budget, and social expenditures grow every year. In regions, budgets are formed with 80% of social orientation, while 15-20% goes to development, which is quite low, and there are also obligations for servicing external debts. It is extremely necessary to reduce the budget deficit, and this should be implemented comprehensively,” said Abai Sarkulov.
The expert voiced a number of proposals for implementing the fiscal function of the customs service, enhancing the work of national companies in attracting foreign investments, developing the field of geological exploration, and improving operations within state procurement, among others.
9 The head of the association of legal entities “Union of Ventilation Equipment Manufacturers of Kazakhstan” Marat Bakkulov focused his speech on the administration of business operations from the perspective of the entity's leadership.
“No businessman will say that he is ‘for’ tax increases; this is clear. But those who operate legally and transparently—we say that everyone should pay taxes. There should not be separate categories for which taxes are reduced because this will always lead to a ‘gray’ scheme,” stated Marat Bakkulov.
A trend towards intentional movement into the ‘gray’ sector and salary systems was voiced.
0 Chairman of the supervisory board of LLP “Holding Company Kazfoodproducts” Eryk Balapanov supported the government's idea of introducing a zero tax rate for the agro-industrial complex. According to him, this will enhance the competitiveness and accessibility of Kazakh agricultural products in the market.
1 The owner of Karaganda International Airport “Sary-Arka” Erlan Ospanov stated that tax evasion is a crime in developed countries. Therefore, business fragmentation should be accompanied by public condemnation. At the same time, the expert emphasized the paramount importance of digitalizing tax administration and gradually reducing inspections as a tool for ensuring business compliance. Entrepreneurs, in turn, must operate in good faith.
Regarding VAT, the businessman emphasized that when an entrepreneur working within the VAT system collaborates with ‘gray’ or ‘black’ entities, it creates difficulties for honest companies. As a result of the reform, it is expected that the burden will be proportional and manageable.
Co-founder of KS Partners and macroeconomic expert at ERG Daniyar Kuanshaliev agreed with the government's approach to increasing taxes but suggested considering the smoothness of the maneuver.
2 Founder of LLP “DAMU DEVELOPMENT GROUP” Abzal Sagymbaev shared his vision of how the reform will impact the construction market. A decision has been made to hold a separate meeting on this issue under the Ministry of National Economy of the Republic of Kazakhstan.
Chairwoman of the board of JSC “Institute of Economic Research” Asel Sarsenbaeva reported the need to eliminate imbalances in the economy, including in tax reform. The current government proposal does not imply a mechanical increase in VAT; it is about fair distribution of the tax burden. From a macroeconomic perspective, this concerns eliminating the imbalance between monetary and fiscal policies, which in the medium term may lead to reduced inflation.
Relevant comments were made regarding all issues raised