Tax reform proposal advanced: Kazakhstan's Ministry suggests 16% Value-Added Tax increase to Parliament
Kazakhstan Implements Tax Code Amendments, Reducing VAT Rate for Certain Sectors
Astonishing news emerges from the Kazakh Ministry of National Economy as they have presented a set of adjustments to the draft Tax Code to the Mazhilis, the lower house of Parliament, on February 20. The modifications target enhancements within tax administration and highlight an increase in the value-added tax (VAT) rate from the current 12% to 16%.
However, a defining concession in the proposed bill is a reduced VAT rate of 10% for select industries. The ministry's press service shed light on this development, revealing that the reductions seek to benefit specific economic sectors.
Significant alterations are also eye-catching in the threshold for mandatory VAT registration, which is poised to plummet from the existing 78.6 million tenge (US$157,350) to 15 million tenge (US$30,028). Additionally, the special tax regime of simplified declaration will now be confined solely to the business-to-consumer sector.
Should the Mazhilis endorse the amendments, they will be submitted to the Senate for further deliberation.
Earlier, the government announced an intention to raise VAT in the context of broader initiatives to overhaul the tax and budget systems. President Kassym-Jomart Tokayev called for further scrutiny in this matter, advocating for a differentiated VAT rate.
While pharmaceuticals may also see rate adjustments in the near future, the most clearly defined industry to reap benefits from the reduced 10% VAT rate is medical services. Other sectors, including book publishing, specific medicines, and certain food products, are granted VAT exemptions rather than reduced rates.
The proposed tax code amendments in Kazakhstan, as revealed by the Ministry of National Economy, aim to reduce the VAT rate for specific sectors like medical services, following President Kassym-Jomart Tokayev's call for a differentiated VAT rate. Meanwhile, politics and business analysts closely watch the progress of these changes, as they could impact various industries beyond general-news headlines.
