Photo courtesy of Akorda Press Service
Kazakhstan’s President Kassym-Jomart Tokayev has instructed the government to further review the proposed increase in the value-added tax (VAT) rate as part of the country’s ongoing tax reform discussions. According to Akorda’s press service, he made the statement during a meeting with business representatives on February 7.
“I had previously refrained from commenting on this matter because, given my position, every word I say could be interpreted as a strict directive. However, I would now like to express my view. The VAT rate should be differentiated,” Tokayev stated, acknowledging that the government’s earlier proposal of 20% was excessive.
“The reaction [to the proposed rate] was quite sharp—at times, in my opinion, overly so—considering that it was merely a preliminary proposal subject to discussion. I emphasize that the government must continue working in this direction while considering input from all stakeholders, including businesses, the public, entrepreneurs, and experts. This year, we must reach a decision,” the president said.
“The state needs balanced solutions that, on the one hand, create favorable conditions and do not hinder businesses, and on the other, bring order to the tax system and increase budget revenues,” he concluded.
The tax reform was first announced by Deputy Prime Minister and Minister of National Economy Serik Zhumangarin during a government meeting with Tokayev on January 28. At the time, he stated that the government aimed to raise the VAT rate from the current 12% to 20% and lower the VAT registration threshold from 78.6 million tenge (approximately $150,000) to 15 million tenge ($29,000). Both proposals faced criticism from the business community. While Tokayev has now called for a review of the VAT rate increase, he did not address the issue of lowering the registration threshold during today’s meeting.
