The President of Kazakhstan Kassym-Jomart Tokayev at the 4th meeting of the National Kurultai in Burabay presented his vision for tax reform, emphasising its key role in fulfilling the state's social obligations to its citizens and the need to eliminate existing shortcomings in the tax system.
At the very beginning of his speech, the Head of State expressed his opinion on tax reform, stressing that tax revenue is the foundation of the entire state system, at the centre of which is the individual.
One must agree with this framing, especially given the fact that the republican budget is socially oriented – more than half of the funds are directed towards the social sphere. This includes pensions, scholarships, educational grants, social payments to vulnerable segments of the population, funding for healthcare, and other social needs.
"Our state is a social state, so we will continue to invest in education and healthcare; this is our constitutional duty. But assistance should be provided to those citizens who genuinely need it; abuse and fraud are unacceptable," the President noted.
In this regard, it is extremely important that the budget always has sufficient funds to meet the state's social obligations. And this cannot be achieved without tax revenue.
The Head of State, agreeing with the opinion of several members of the National Kurultai, particularly highlighted the importance of explaining all tax-related initiatives to the public.
Among the key problems of the current tax system, the President highlighted the existence of various tax regimes, numerous exemptions and preferences, which have created a kind of tax offshore within the country.
As a result, two main groups of entrepreneurs have emerged – those who, using loopholes in the legislation, have managed to reduce their tax base, and those who pay all taxes in good faith. The second group of entrepreneurs turned out to be less competitive.
Kassym-Jomart Tokayev paid particular attention to the problem of business fragmentation aimed at tax evasion.
"It must be acknowledged that business fragmentation has resulted from shortcomings in the legislation; this issue was insufficiently addressed by both the Government and the deputies," he stressed.
According to him, in the pursuit of impressive figures regarding the number of registered taxpayers, a proper analysis of the real state of affairs was not carried out.
"Again, they chased impressive figures: claiming that over 2 million taxpayers – individual entrepreneurs and legal entities – are registered in the country. But they did not analyse what these businesses are, where they came from, how much tax they pay, or whether they pay at all," the Head of State noted.
Concluding the topic, the President appealed to the government and parliament to urgently make the necessary changes to the legislation in order to rectify the current situation.