As part of the implementation of the tax and budget reform, Deputy Prime Minister and Minister of National Economy Serik Zhumangarin held a meeting to strengthen tax administration, reports Primeminister.kz.
One of the steps in the reform of the fiscal system is the fight against the shadow economy, which undermines the stability of economic development. As noted at the meeting by Vice Minister of Finance Yerzhan Birzhanov, over the past 5 years, the share of the unobserved economy in Kazakhstan's GDP has steadily decreased: from 23.69% in 2019 to 17.52% in 2023. This is mainly due to the gradual transition to cashless payments. The highest share of the shadow economy remains in wholesale and retail trade (3.53%), healthcare (2.04%), agriculture, forestry, and fisheries (1.96%), construction (1.92%), and education (1.49%).
“We see the solution to the long-standing problem of the existence of the shadow economy through fiscal reform involving sectoral, judicial, and supervisory government agencies. This is to jointly participate in identifying abuses that lead to the loss of state resources,” noted Yerzhan Birzhanov.
The goal for 2025 is to reduce the share of the unobserved economy to 15% of GDP. To achieve this, the Ministry of Finance proposes to include problematic sectoral issues that hinder the exit of the sector from the shadow economy as KPIs in the development plans of government agencies.
“Development plans for government agencies should be viewed from a new perspective, with a service-oriented approach and digitization of sectors. This will allow us to move away from a formal approach to the implementation of the planned actions within the framework of the Comprehensive Plan for Combating the Shadow Economy. We propose that government agencies include KPIs with measures to combat the shadow economy in their development plans for 2025-2027,” he noted.
The meeting also addressed the IMF's recommendations on removing banking secrecy restrictions when revising the Tax Code. As part of strengthening tax administration, it was proposed to change the methodology for calculating the share of the shadow economy in GDP, and to enhance the digitization of sectors, especially those with a high share of the shadow economy. In place of the previous Comprehensive Plan for Combating the Shadow Economy, five sectoral government agencies with low performance indicators in this area will develop their own Roadmaps with approaches and actions. Other government agencies will include KPIs with measures to combat the shadow economy in their sectoral development plans. The Ministry of Finance, as the coordinating and controlling body for the comprehensive work of the government in this direction, will enhance its functions to monitor the shadow economy.
All approaches, steps, and actions of government agencies aimed at reducing the shadow economy will be compiled into a Roadmap. Additionally, Serik Zhumangarin tasked the Ministry of Finance, along with the Ministry of Justice, sectoral government agencies, and the National Chamber of Entrepreneurs "Atameken," to develop proposals to improve the efficiency of tax audits and control, as well as to formulate suggestions for further reducing the share of the shadow economy.