Differentiating VAT Rate is Advocated by President Tokayev
Title: Kazakhstan's VAT Rate Shuffle: Tokayev's Call for Customized Tax Strategy
Astana's Power Player, President Tokayev, Steers Tax Policy
![President Tokayev addresses domestic business representatives. Photo from Akorda]
In a meeting with domestic business bigwigs on Feb 7, President Kassym-Jomart Tokayev suggested a reevaluation of Kazakhstan's Value-Added Tax (VAT) rates, proposing a tailored approach.
Tokayev: No Haste, Just Strategic Thinking
As per Akorda, the prez urged for a thorough analysis and a well-orchestrated strategy when considering any changes. He accentuated the importance of examining various options tailored to diverse economic sectors.
Tokayev emphasized the significance of settling on the VAT upper limit responsibly, factoring in exact calculations and professionals' opinions, along with Parliament members' insights.
"It's a preliminary proposal, up for debate. The government's work on this matter should continue, heeding all parties' opinions - businesses, the public, entrepreneurs, and experts. This year, we need to make a call," stated Tokayev.
Favorable Business Conditions with Budget Boost
Tokayev underlined the need for optimal solutions that stimulate businesses without erecting barriers and promote fiscal discipline to boost budget revenues.
Enrichment: Current standard VAT rate in Kazakhstan: 12%. Proposed increases to 16% have been considered but later revised [2][3]. A new 10% VAT rate is suggested for medical services [3]. Reduced VAT rates for medical services and pharmaceuticals, starting at 5% in 2026 and potentially 10% from 2027, are also in the mix [2][3]. Exemptions are proposed for healthcare, socially vital goods, domestic-published books, and related services [2][3].
Breaking the Ice: A Re-beginning
Initial plans to boost the VAT rate to 20% were scrapped, with Tokayev encouraging a focus on tax enforcement rather than universally increasing the VAT rate [1]. Government priorities now concentrate on digitalization, effective budgeting, and revenue distribution [1].
Public Opinion: Modernization vs Pressure on Businesses
The proposed tax changes have sparked a heated debate among the public and politicians. Some argue it's modernization, fairness, and long-awaited growth [2]. On the flip side, critics warn of escalated business pressure and potential inflation.
Ultimately, the government aims to strike a balance between revenue generation, economic stability, and public opinions, with customized tax rates to support diverse sectors. The ball is now in the Senate's court as the final decision awaits the President's approval.
- The President's call for a customized tax strategy, specifically the suggestion of varying VAT rates in Kazakhstan, is not just a matter of politics or general news, but also directly impacts the business sector and finance, as changes in taxation can significantly affect the profitability and growth of enterprises.
- The ongoing debate regarding the proposed tax changes in Kazakhstan, which includes the potential introduction of new VAT rates for different sectors, highlights the intersection of business, finance, politics, and public opinion. This demonstrates how crucial it is for policymakers to consider multiple factors when making decisions that can impact the economy and the well-being of companies and citizens.
