Kazakhstan is exploring ways to optimize its state budget, drawing inspiration from recent U.S. reforms. Deputy Prime Minister and Minister of National Economy Serik Zhumangarin revealed that Elon Musk, head of the newly established U.S. Department of Government Efficiency (DOGE), has offered assistance in implementing similar measures in Kazakhstan.
According to Zhumangarin, Musk proposed helping the government identify potential cost-cutting areas, though he acknowledged that reducing social expenditures would be challenging. He welcomed Musk’s input, suggesting the formation of a working group to assess possible savings while ensuring that cuts do not negatively impact ordinary citizens.
The discussion on budget efficiency comes as Kazakhstan prepares for tax reforms, including raising the value-added tax (VAT) from 12% to a proposed 16-20% and lowering the revenue threshold for VAT registration from 78 million KZT to 15 million KZT ($150,000 to $29,000). Officials estimate the changes could generate an additional 5-7 trillion KZT in revenue.
However, the proposed reforms have met resistance. A petition argues that lowering the VAT threshold will disproportionately burden small and medium-sized enterprises (SMEs), forcing them to hire additional staff and leading to price increases. Some lawmakers have also warned that raising the VAT rate could drive inflation higher.
Senate Speaker Maulen Ashimbayev has urged the government to reassess budget efficiency before implementing tax hikes, pointing to the U.S. model, where the Department of Government Efficiency is working to cut wasteful spending. While he does not advocate blindly following the U.S. approach, Ashimbayev believes Kazakhstan should consider similar measures as it debates tax increases and fiscal responsibility.
As previously reported, Kazakhstan’s Ministry of National Economy had proposed reducing the number of taxes in the country by 21% a year ago.
