Representatives of the government discussed amendments to the Tax Code with the business community of the Aktobe region. The central theme of the meeting was the discussion of government proposals to establish differentiated VAT rates: 16%, 10%, 0%, and exemptions, reports primeminister.kz.
Proposals for the complete abolition of VAT for the agro-industrial complex and the introduction of an intermediate rate of 10% for the healthcare and commercial medicine sectors were also considered.
“We are grateful that the concept of differentiated rates of 0% and 10%, which we have been discussing as a proposal since 2023, has been accepted. Regarding the 10%, you currently point to medicine. Will there be other options, or can we suggest who else to include?” asked entrepreneur Victoria Isarova, head of the financial services sub-sector of the Industry Council for Trade and Services of the "Atameken" Chamber.
The Deputy Minister of National Economy noted that it is important to understand that VAT is one of the key sources of budget replenishment.
“Increasing and differentiating the VAT rate will reduce the budget's dependence on volatile oil revenues and finance priority state projects. We propose VAT exemption for agricultural producers. Currently, peasant farms are not VAT payers, and we intend to maintain this. Legal entities engaged in agriculture pay 30% of the due amount. Now they will be exempt from this tax, making products such as potatoes, tomatoes, onions, cabbage, etc., more competitive. The question of who will be subject to the 10% rate requires further discussion. We also propose a reduced rate for the healthcare sector. All proposals will be collected, analyzed, and resolved in cooperation with you,” said Deputy Minister of National Economy Bauyrzhan Omarbekov.
Entrepreneurs expressed their concerns about the potential consequences of the reform, including the impact of new rates on production costs and prices, which could ultimately affect consumers.
“It is necessary to create such dialogue platforms. Each industry has its specifics, and only through joint efforts can we determine this differentiation. It’s not just about putting a number; a global and prolonged effort is needed to assess whether the rates of 10%, 12% will indeed affect revenue growth. Another major issue is the short-term nature of this inflation period. We believe that everyone should pay taxes. Regardless of the outcome, those who have paid honestly will pay even more, while those who have remained in the shadows will continue to do so,” shared the opinion of Madiyar Espaev, director of "PKF Property Valuation Aktobe" LLP and a member of the financial services sub-sector of the Industry Council for Trade and Services of the RPP.
It was noted that all questions and proposals raised during the meeting would be considered when making amendments to the Tax Code project and related bills that will be reviewed in the Majilis.
“All proposals voiced today in the meeting are the result of active discussions within the framework of the meetings of the industry councils of the "Atameken" Chamber. Differentiation of rates is indeed necessary. For us, as a chamber, it is important to ensure fair taxation that takes into account the interests of both micro and small businesses. The Tax Code itself should be simple and predictable,” emphasized Didar Borankulov, director of the Entrepreneurs' Chamber of the Aktobe region.
Earlier, it became known that the proposed reform regarding the abolition of social tax and OPRV payments by entrepreneurs could take place on the condition of increasing the VAT rate to 20%. Then the state would have revenues to cover social contributions instead of employers. However, with the currently proposed VAT rate of 16%, social contributions are suggested to remain unchanged.
The Ministry of Finance is also considering issues related to reducing ineffective tax benefits and differentiating personal income tax based on individual income.
Previously, Kazakhstan considered the issue of increasing the VAT rate from 12% to 20%, while intending to reduce the burden on the wage fund to 30%. Additionally, Deputy Prime Minister - Minister of National Economy Serik Zhumangarin proposed to lower 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 project to the Majilis by February 20, 2025.