Kazakhstan: Zhumangarin Explains Decision Not to Introduce Flat Luxury Tax

Deputy Prime Minister and Minister of National Economy Serik Zhumangarin explained the government’s reasoning for not implementing a blanket luxury tax, instead opting to increase taxes on specific high-value goods and properties — such as elite real estate, luxury vehicles, and premium alcohol and tobacco, Orda.kz reports.

Zhumangarin said the key challenge was agreeing on the definition of luxury.

We need to correctly define what luxury is. Based on what will be taxed now, this is luxury. If the total value of all your real estate exceeds 450 million, you will pay — if I'm not mistaken, the base rate will be three million a year, plus another two percent of the excess value. Then, if the car costs more than 75 million, you will pay an increased rate. On expensive alcohol, on expensive cigars. And what else, in your opinion, is luxury? I don't even know,said the minister. 

Asked why the government preferred selective taxation instead of a universal luxury tax, Zhumangarin emphasized the need for a clear framework to avoid unintended consequences.

When you introduce such things, there must be a clear understanding. If tomorrow you do not have a clear understanding, then innocent people may suffer. I am exaggerating, of course, there are no guilty or innocent people here. But you can tax the wrong people. Do you understand? It is wrong,
he added. 

President Qasym-Jomart Toqayev proposed a luxury tax in 2022 as part of broader economic reforms. 

Original Author: Artyom Volkov