Kazakhstan is preparing for a large-scale tax reform, designed to modernise the fiscal system and ensure fair competition. The key elements of the forthcoming changes will be raising the basic VAT rate to 16%, introducing differentiated rates for socially significant sectors and a legislative ban on tax avoidance schemes through the artificial splitting of companies.
The current tax system faces a range of systemic challenges. The shadow economy, opaque financial schemes and the uneven distribution of the tax burden hinder the formation of a healthy business climate and undermine trust in state institutions.
Of particular concern is the practice of artificially splitting large companies into many small enterprises in order to obtain benefits intended for small businesses. This deprives the budget of significant funds and creates unequal competitive conditions for conscientious taxpayers.
A key element of the reform will be the enshrinement in the Tax Code of mechanisms to counter the artificial splitting of companies. The new rules will provide tax authorities with effective tools to identify and suppress such tax evasion schemes.
DIFFERENTIATED APPROACH TO VAT
An important element of the reform is the overhaul of the value-added tax system. The increase in the basic VAT rate from 12% to 16% will be accompanied by the introduction of a differentiated approach for various sectors of the economy.
Of particular note is the introduction of a zero rate for the agri-food complex and food producers. This measure will support domestic agricultural producers and curb price rises on food products.
The pharmaceutical industry will receive a reduced rate of 10%, which will help develop domestic medicine production and increase their availability for the population.
FROM COMPLEXITY TO TRANSPARENCY
An important step in combating the shadow economy will be lowering the threshold for mandatory registration as a VAT payer from 20,000 to 3,800 MCI (approximately 15 million tenge). This will ensure wider coverage of taxpayers and increase the transparency of economic processes.
The initial version of the reform envisaged raising VAT to 20%, but after intervention by the President and consultations with the business community a more balanced decision was adopted. At the same time, taxpayers exempt from VAT will retain the right to voluntary registration as payers of this tax, if it aligns with their business interests.
BALANCE OF INTERESTS
The government abandoned the idea of compensating for the VAT increase by reducing the burden on the payroll fund. The abolition of mandatory employer pension contributions and the adjustment of social tax proved impractical, as the potential revenue from VAT at a rate of 16% would not provide sufficient coverage for the state's social obligations.
FOUNDATION FOR ECONOMIC GROWTH
The proposed tax reform represents a comprehensive rethinking of fiscal policy. The ban on the artificial splitting of businesses, combined with a differentiated approach to VAT, will create the basis for forming a fairer tax system.
This approach will ensure a balance between the fiscal function of taxes and their regulatory role, create conditions for fair competition and bring a significant portion of the economy out of the shadows, which will contribute to sustainable economic growth and social stability.