Kazakhstan Scraps Universal Tax Declarations Amid Public Concerns
In a surprising move, the Kazakh government has proposed canceling the universal tax declaration system set to take effect in 2025. The decision, aimed at alleviating public anxiety amid worsening economic conditions, will exempt over 90% of the population from filing declarations. Experts argue that this adjustment is necessary and practical, as the reform would otherwise add unnecessary strain on taxpayers without significantly benefiting state revenues.
Public Backlash and Policy Reassessment
The Universal Declaration initiative was intended to include approximately 8 million additional citizens in 2025, encompassing private sector employees, pensioners, and students. However, widespread public concern about the burden on taxpayers and tax authorities prompted a reevaluation. Finance Minister Madi Takiyev announced the exemption on November 19, citing the country’s advanced digital infrastructure, which already tracks key financial data.
Prime Minister Olzhas Bektenov echoed these sentiments, directing the Ministries of Finance, National Economy, and Justice to draft legislative amendments within three days. He emphasized that the reform had “caused concern of the population, which was brought to the attention of the head of state.” He added that a widespread income declaration is unnecessary because the databases of state agencies in Kazakhstan are “highly digitized.”
Streamlined Tax Obligations
The revised approach retains declaration requirements for specific groups, including:
- Citizens with assets abroad.
- Individuals making significant purchases (exceeding 74 million KZT, or approximately $149,000, in 2024).
- Those receiving income are subject to independent taxation.
Voluntary declarations will remain an option for all citizens.
A Phased Reform
The universal declaration system began in 2021 and was implemented in stages. Initially, it targeted government officials and their spouses. The requirement extended to public sector employees and the quasi-public sector in subsequent phases. By 2024, business leaders, entrepreneurs, and their spouses were included.
The final stage, which aimed to include the broader population, faced criticism for being outdated in the digital era. President Kassym-Jomart Tokayev acknowledged this, stating, “It is planned that about 8 million more people will submit declarations next year. However, we should consider that the concept of universal income declaration was adopted 14 years ago. During this time, the country has made significant progress in digitalization and fintech. Databases of various government agencies have been integrated. Financial and tax control has been strengthened. Given these large-scale changes, the question arises as to whether it is advisable for citizens falling under the fourth and final stage to submit declarations. The government needs to work out a solution to this.”
Expert Analysis
Political scientist Gaziz Abishev highlighted the effectiveness of the reform’s earlier stages, which targeted those most likely to influence public funds or earn significant income.
“The first three stages have already included bureaucrats, civil servants, quasi-public sector employees, and businesspeople. Everyone who manages public funds or earns a considerable income within Kazakhstan’s economy has already been required to report and will continue to submit declarations,” Abishev explained.
The fourth stage, set to include around 8 million additional citizens, drew criticism for its lack of economic and practical justification.
“Who are the remaining 8 million subject to the fourth stage? Most are low-income people—pensioners, simple rural laborers, niche industry specialists, and other self-employed individuals. Generally, these people neither have access to the budget trough nor lucrative sectors of the economy. The likelihood that they are hiding assets in foreign jurisdictions is virtually zero. Moreover, all information about their property ownership in Kazakhstan and bank accounts is already accessible to the Tax Committee, the Financial Monitoring Agency, Anticor, and other responsible authorities,” Abishev added.
The reform’s potential for public discontent further complicates its implementation.
“It is not only economically inefficient but also politically damaging to scrutinize these people’s finances in search of a few unaccounted-for bills. Ordinary people might think: ‘You work tirelessly from morning till night to support your family, struggling to keep up with inflation, and now you’re expected to account for every tenge while fearing that the tax authorities might show up with an audit,’” the political scientist concluded.
The concerns underline the importance of tailoring tax policies to the realities of citizens’ lives, balancing economic efficiency with public sentiment.
