Kazakhstan will implement an updated Tax Code beginning January 1, 2026, following its signing on July 18. Among the most debated changes is the revision of the transport tax for vehicles over 10 years old.

Under the new code, owners of cars aged 11 to 20 years will receive a 30% tax discount, while those with vehicles older than 21 years will benefit from a 50% reduction. The decision stands in contrast to recent trends of increasing the overall tax burden. Yet experts warn that behind the populist optics lie significant environmental and road safety risks.

A Political Gesture Ahead of Elections?

Tax consultant Aidar Masatbaev views the reform as more political than economic in nature.

“People complained that the tax on old cars was too high. Apparently, the advocates of a softer tax policy prevailed,” he said in an interview with inbusiness.kz.

Masatbaev added that the measure is unlikely to meaningfully reduce the cost of car ownership. Instead, factors like rising fuel prices and declining real incomes play a more critical role. “The problem is that most people cannot afford to buy a new car,” he noted.

Technical and Environmental Risks

According to official statistics, more than 80% of Kazakhstan’s vehicle fleet comprises cars over 10 years old. Of these, over 2.2 million vehicles are more than 20 years old. These aging cars not only lag in efficiency but also pose serious safety risks.

“Old cars are becoming a source of increased danger. Their consumables are more expensive, and the desire to save on repairs leads to risks on the roads,” Masatbaev warned.

He cautioned that offering tax incentives could further entrench the use of obsolete, potentially unsafe vehicles.

Additionally, the secondary car market lacks transparency. Many transactions go unregistered, reducing the effectiveness of fiscal measures and minimizing the impact of tax relief on state revenues.

Masatbaev also questioned proposals to increase taxes on old vehicles, arguing that such moves would only heighten public dissatisfaction and strain the tax system. He recommended automating debt collection to improve efficiency, but acknowledged this could erode public trust in the tax authority.

Kazakhstan’s Aging Car Fleet, by the Numbers

According to Ranking.kz, in May 2025, Kazakhstan had 5.34 million registered passenger vehicles, an 11.4% increase from the previous year. Two-thirds, approximately 3.54 million cars, were more than 10 years old.

While the share of aging vehicles has slightly declined (from 70.3% in April 2023 to 68.3% in April 2024), the number of cars aged 10-20 years rose 12.4% to 1.27 million. Vehicles over 20 years old now number 2.27 million, a 5.7% increase.

The highest concentrations of old cars are found in the Almaty region (449,600), Almaty city (355,200), Karaganda (237,300), Zhambyl (236,200), Turkestan (235,000), and East Kazakhstan (220,100). Zhambyl holds the highest percentage of cars over 10 years old at 83%, followed by Zhetysu (79.3%) and Almaty (78.4%).

While tax breaks may offer temporary relief to car owners, analysts argue that without a comprehensive strategy for renewing the vehicle fleet, promoting new car purchases, and scrapping outdated ones, the reform remains tactical rather than strategic. As one analysis put it, “such steps resemble an attempt to extinguish a fire without eliminating its source.”