"Immediate failure to fasten seatbelt"
In a significant move, President Kassym-Jomart Tokayev has signed the new Tax Code and amendments on taxation issues, which is set to take effect from January 1, 2026. The new code, as highlighted by Deputy Prime Minister Serik Zhumanjarin, aims to bring about a series of changes that will streamline tax compliance and stimulate economic activity.
One of the main novelties in the new Tax Code is the consolidation of businesses operating under a special tax regime or on a simplified system into just three categories. These categories include self-employed individuals, entities eligible for simplified declarations, and farmers. The self-employed will now be able to calculate and pay their taxes via a mobile application, a move that is expected to ease administrative burden and encourage economic activity.
Zhumanjarin, in his address, compared the adoption of the new Tax Code to the automotive reform in Kazakhstan, emphasising the need for reform and modernisation. He also stated that the primary objective of the new code is to give businesses the opportunity to grow, while the second important task is to stabilise state finances.
In a bid to support businesses, Zhumanjarin said, "We need to give out carrots," a metaphorical reference to incentives for businesses. However, he did not mention a specific percentage of VAT in the "beloved" West, indicating that the focus remains on Kazakhstan's tax policies.
It is worth noting that the new Tax Code does not solely focus on VAT. Zhumanjarin clarified that the new code is not just about increasing VAT, but about simplifying tax obligations for businesses and reducing the tax-related administrative load. The abolition of the single land tax and reductions in some other charges and fees are also part of this effort.
The conversation did not involve discussions about bribing with money instead of belts, as some may have speculated. Instead, it was a constructive dialogue about the future of taxation in Kazakhstan, with Zhumanjarin emphasising, "Pay taxes and sleep soundly," in reference to the transparency and fairness of the new code.
While the new Tax Code will affect many businesses, it is important to note that a significant VAT reform and lowered VAT registration threshold will mainly impact VAT-registered entities broadly rather than just special tax regimes. This means that businesses outside the special tax regimes may also need to adjust to the changes.
In summary, the key novelty for businesses under special or simplified tax regimes in Kazakhstan's new Tax Code is the consolidation into three simplified categories with improved digital tax payment tools for the self-employed. The new code is expected to streamline tax compliance, reduce the administrative burden, and stimulate economic activity.
[1] Source: Kazakhstan Ministry of Finance website.
- The new Tax Code in Kazakhstan, as highlighted by Deputy Prime Minister Serik Zhumanjarin, aims not only to simplify tax obligations for businesses but also to reduce the tax-related administrative load.
- The consolidation of businesses operating under a special tax regime or on a simplified system into just three categories, as stated by Zhumanjarin, is one of the main novelties in the new Tax Code.
- In the new Tax Code, the self-employed will now be able to calculate and pay their taxes via a mobile application, a move that is expected to ease administrative burden and encourage economic activity.
