Tax Breaks Planned in Kazakhstan to Ease Pressure on Businesses and Investors

Kazakhstan’s Ministry of National Economy has prepared a large package of amendments to the tax code. Officials say the changes should ease pressure on entrepreneurs and help attract foreign investors, Orda.kz reports.

In the document, officials admit that mandatory goods labeling, new excise taxes and some older tax code rules create an unnecessary burden on businesses. Small and medium-sized enterprises are under particular pressure.

Special attention is paid to investors. Non-residents are currently required to pay tax even on advance payments for long-term projects, although the work may last for years. Officials say this discourages large investments. They propose changing the rule so that such amounts are not treated as income before the actual fulfillment of obligations.

One of the key problems is corporate income tax, which companies have to pay even on money they spend on mandatory labeling. Businesses must buy equipment and software and pay the labeling operator, which increases costs. The authors of the document propose allowing companies to deduct these costs to reduce the tax burden.

The ministry also plans to restore tax preferences for priority investment projects, exempt imports of raw materials and materials under investment contracts from VAT, and allow subsoil users to offset VAT on goods they transfer to the state for defense purposes.

Officials also want to exempt air navigation services for international flights from VAT, so Kazakhstan does not lose transit traffic and can comply with international obligations.

The draft amendments are open for public discussion until July 27.

Original author: Eva Golovintseva

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