President Tokayev of Kazakhstan, in his landmark address to the lawmakers at the start of the 33rd session of the parliament has called for rehash of the tax laws.
It is noteworthy that some major amendments to the Tax Code of Kazakhstan were already introduced in December 2023.
The presidential speech of 2 September 2024 points the need for further rehash of the tax laws.
Here is the relevant portion from his speech :
It is obvious that public finances alone are not enough to ensure dynamic economic growth. It is necessary to create favorable conditions for increasing business activity by attracting private investment into the economy. This requires, first of all, a stable tax policy that stimulates high-quality development and responsible behavior of business.
The new Tax Code is designed to reboot the existing system. The Code should be aimed at building a fundamentally new tax administration based on trust in taxpayers. It is extremely important to simplify the Code, make its provisions understandable to all economically active citizens in order to eliminate the possibility of different interpretations of the rules.
It is necessary to optimize tax regimes without worsening the current favorable conditions for entrepreneurs. As an example, we can cite the introduction of a retail tax. Business believed in this norm, began to come out of the shadows, fragmentation decreased. But entrepreneurs who work primarily with the population should fall under this regime.
Fully unleashing the potential of consumer services and trade can provide the necessary rapid effect in terms of economic growth, increased tax revenues and employment.
To achieve success in fiscal reform, it is necessary to implement total digitalization of administration. In order to mitigate corruption risks and ensure transparency, it is necessary to accelerate the transfer of tax processes to an electronic format. It is desirable to adapt the entire tax policy to changing fiscal conditions, including a revision of tax rates.
There is a pressing need to establish differentiated rates of individual income tax.
The punitive approach to tax administration should also be abandoned. I believe it is possible to increase the threshold of tax arrears at which notifications will be sent without the use of forced collection. In the event of exceeding the threshold of tax arrears, restrictions should be imposed only within the limits of the debt, i.e. the entire bank account will not be blocked. In the case of large tax arrears, payment installments should be provided without collateral. We must strive to completely abandon tax audits according to the plan. To do this, we need to improve the risk management system.
Increasing the efficiency of tax incentives has become a pressing task. Tax reporting must be provided for all incentives. It is necessary to preserve those that really stimulate business. For example, preferences can be provided for investors focused on developing production. We are talking about a one-time deduction for the construction, acquisition, modernization, and reconstruction of assets. It is important to provide incentives for exporters of high-value-added products; they should receive more support than any other business.
As part of the consideration of the draft of the new Tax Code, I instruct that a thorough discussion be held in the Government and Parliament. Complex but necessary solutions must be found. Haste in this matter is unacceptable. Therefore, I consider it possible to postpone the adoption of the new Code until next year in order to prepare this law at a high-quality level. /// nCa, 3 September 2024