What Does The Government Propose in New Tax Code?

The government has presented a draft of Kazakhstan’s new Tax Code. The key features include a new VAT rate of 16% and a lowered VAT registration threshold of 40 million tenge. Orda.kz breaks down what other changes await Kazakhstanis.

The draft law has been submitted for its first reading. Its main objectives are reducing taxes and benefits, enhancing transparency, and making taxation more targeted.

What the Government Is Proposing

The draft proposes reducing taxes, benefits, and mandatory payments and reducing the number of special tax regimes to just three — for the self-employed, those under the simplified tax system, and farmers. It also suggests introducing a system to monitor tax benefits to determine who genuinely needs them and who may be taking advantage of their status.

• Standard rate: 20%
• Banks and gambling businesses: 25%
• Social services and manufacturing: 10%
• Agriculture: 3%

Support for the Real Sector

• Tax breaks for investments in buildings, equipment, and software
• Incentives for modernization and repair
• Tax holidays on old vehicles and reduction of mineral extraction tax for extraction from man-made waste.
  
  

Taxes for Individuals

• Pensions from the Unified National Pension Fund will be exempt from income tax
• New salary deduction system of 30 MCI
• Reassessment of taxes on securities transactions
• Higher taxes on luxury items like yachts, private jets, and premium alcohol or tobacco

Subsoil Users

• New Alternative Subsoil Use Tax+ regime for aging oil and mineral deposits
• Simplified deductions for geological exploration and processing
• Lower extraction rates for man-made sources

Tax Administration

• Full service model: from business registration to closure — all online
• Desk audits to replace scheduled field inspections
• Horizontal monitoring: Businesses that voluntarily disclose reports will be exempt from inspections and fines

What Will Increase

Reduced VAT rates will apply to sensitive sectors. The VAT registration threshold will drop from 78 million to 40 million tenge.

What Parliament Wants: More Targeted Measures

Finance and Business

• More differentiated tax rates for banks and casinos
• Zero CIT for the social sector
• Additional taxation for the gambling industry

Social Sector

Reduced or zero VAT and CIT for medicine, education, and culture. Tax holidays for authors. Reduction of the divorce fee (some are proposing the opposite - to increase it).

Industry and Agriculture

• Maintain special tax regimes, especially patents and simplified taxation
• Consider a turnover tax for SMEs in place of VAT and CIT
• Full income tax exemption for farmers and small-scale agricultural producers

Excise and Harmful Products

• Higher excise duties on alcohol, tobacco, sugary drinks, and trans fats
• Introduction of a license fee for hookah establishments
• Hot topics: discussions and conflict of opinions

Luxury Tax

• Property tax hikes on real estate worth over 450 million tenge
• Excise taxes on cars over 75 million tenge, yachts, private jets
• +10% excise on cigars and premium alcohol

The new tax code is expected to bring in 4 to 5 trillion tenge annually, helping reduce the country’s reliance on the National Fund. However, the government acknowledges that inflation could rise by 2.5–3% in the short term, but promises this effect will be temporary. 

So far, the working group has received over 700 deputy amendments. Committees, including representatives from Atameken, the business sector, and the Ministry of Finance, continue to revise the draft.

The Committee on Agrarian Issues insists on the return of VAT overpayments to the Food Corporation.
The Social Committee demands a comprehensive overhaul of taxation across sectors like sports and science.

The Finance and Budget Committee recommended approving the draft in its first reading, but emphasized that significant revisions are still needed before final approval.

The majority of Majilis members voted in favor of the draft. Seven opposed, and ten abstained.

Original Author: Ilya Astakhov