Page 293 – The Times Of Central Asia

28 Apr 2025

Central Asia, Kazakhstan, Kazakhstan Business & Economy

Kazakhstan to Increase Taxes for High Earners

April 28, 2025
By Dmitry Pokidaev

The Kazakh Ministry of National Economy has submitted a second package of amendments to the tax legislation to parliament, proposing an increase in the individual income tax rate for high earners. The second package was submitted to the Mazhilis (the lower house of the Kazakh parliament) on April 25.

One of the key provisions is the introduction of differentiated individual income tax rates based on employees’ earnings. “Citizens with lower incomes will pay personal income tax at a lower rate than high-paid workers,” the Ministry of National Economy stated.

The ministry has not specified the exact income levels that will be subject to the higher rate. However, in early April, Minister Serik Zhumangarin indicated to parliamentarians that an increased rate of 15% was being proposed for employees whose annual income exceeds 8,500 monthly calculation indices (MCI).

Currently, one MCI in Kazakhstan is valued at 3,932 KZT ($7.64). By 2026, when the new Tax Code is expected to come into force, it is planned to rise to 4,129 KZT ($8). Based on these figures, the threshold for the increased personal income tax rate would start at 35 million KZT per year (approximately $68,000) or 2.9 million KZT per month ($5,600) in 2026.

Not all of a high earner’s salary would be taxed at the increased 15% rate. Instead, only the portion exceeding the 2.9 million KZT threshold would be taxed at the higher rate; income up to that threshold would continue to be taxed at the standard 10% rate.

Currently, Kazakhstan levies a flat personal income tax rate of 10%. The Ministry of National Economy projects that the introduction of a progressive scale could increase tax revenues by 70 billion KZT per year (approximately $13.5 million).

Additional Tax Code Reforms

The ministry also proposed optimizing deductions for medical, education, and social contributions. A single basic deduction of 30 MCI per month would be introduced, replacing the current deduction of 14 MCI. All additional deductions would be eliminated, aiming to simplify accounting procedures and reduce the administrative burden for individuals and employers.

At present, employees can exempt from taxation a portion of their salary equivalent to 14 MCI, or about 55,000 KZT ($106), upon request. This exemption is available to all working citizens but can be used at only one place of employment. Under the proposed changes, starting in 2026, Kazakhstani citizens would be able to exempt 123,800 KZT ($239) per month from taxation.

The ministry also proposed strengthening liability for violations related to compulsory social and health insurance and the use of special tax regimes. These measures are part of a broader strategy to reinforce tax compliance across the country.

In total, the government has proposed 71 amendments to the draft new Tax Code and related legislation, along with 67 amendments to the current Tax Code.

As previously reported by The Times of Central Asia, the Mazhilis approved the draft of the new Tax Code in its first reading in early April. However, the proposed reforms continue to provoke debate and criticism from deputies, experts, and entrepreneurs.

28 Apr 2025

Central Asia, Uzbekistan, Business & Economy, Uzbekistan Business & Economy

Uzbekistan Wins Arbitration Case Against Turkish Textile Company

April 28, 2025
By Sadokat Jalolova

On October 10, 2024, the International Centre for Settlement of Investment Disputes (ICSID) announced its decision in the case between Turkish company Bursel Tekstil Sanayi ve Dış Ticaret A.Ş. and Uzbekistan. According to Uzbekistan’s Ministry of Justice, the tribunal rejected all claims made by Bursel Tekstil.

The dispute began in July 2017, when Bursel Tekstil accused the Uzbek government of breaching promises related to cotton pricing and tax policies, actions the company claimed had led to its bankruptcy. Bursel Tekstil sought approximately $700 million in compensation. However, the tribunal ruled in favor of Uzbekistan and ordered Bursel Tekstil to cover the country’s legal costs.

Bursel Tekstil had invested in Uzbekistan’s textile industry in the early 2000s, helping to build a textile plant in Tashkent with funding from the OPEC Fund for International Development and the European Bank for Reconstruction and Development. By 2011, the company operated three factories in Uzbekistan.

Uzbekistan was represented in the arbitration by the Ministry of Justice and the American law firm White & Case. Under ICSID rules, the tribunal’s decision is final and binding.

Previously, The Times of Central Asia reported on another ICSID decision in May 2024, ordering the return of four resorts in Kyrgyzstan to Uzbekistan. In that case, Uzbekistan successfully argued that Kyrgyzstan had violated a 1992 agreement among former Soviet Union countries, which stipulates that property belonging to one country but located on the territory of another remains the property of the original owner.

28 Apr 2025

Central Asia, Home, Kazakhstan Local Politics, Local Politics, Kazakhstan, Features, Kazakhstan Featurees, Kazakhstan Home

Money Seized from Corrupt Kazakh Officials to Fund Water Pipelines

September 10, 2025
By Vagit Ismailov

In Kazakhstan’s Akmola region, water supply systems will be built in the towns of Kosshy and Makinsk using funds seized from corrupt officials. The government of Kazakhstan reported that more than 1 billion KZT (approximately $2 million) from the Special State Fund has been allocated for this purpose.

Water Supply for Kosshy and Makinsk

A total of 476.7 million KZT (about $925,000) has been allocated to complete the construction of a water supply network in Kosshy. The project envisions full centralization of the town’s water supply. Currently, approximately 50 kilometers of pipeline have already been laid, with the total network planned to span 64.1 kilometers. The facility is expected to be operational by the end of this year.

The town’s existing infrastructure is designed for 30,000 residents, while the official population has already surpassed 50,000. According to Kosshy’s General Development Plan, the number of residents could reach 150,000 by 2038.

In Makinsk, the reconstruction of water supply networks is ongoing. The project includes laying 72.7 kilometers of new pipes. To date, 45 kilometers have been completed using previously allocated funds. A new allocation of 606.4 million KZT (around $1.2 million) will enable the full completion of the project, ensuring centralized water supply for the town’s more than 18,000 residents.

Returned Assets Benefit Society

Recovering illegally withdrawn assets has become a key priority of Kazakhstan’s Anti-Corruption Service. This work, based on the principle of “follow the money,” is a major component of the national anti-corruption strategy. Since 2022, over 1.12 trillion KZT ($2.1 billion) has been recovered for the state and quasi-state sector entities. Asset recovery efforts are conducted both domestically and internationally, using cooperation channels such as GlobE, CARIN, and ARIN.

Schools, Medical Centers, and Water Pipelines: How Returned Funds Are Used

The Special State Fund has already financed approximately 280 projects in education, healthcare, social protection, sports, and the modernization of engineering and water networks.

Earlier this year, it was reported that 1.4 billion KZT (around $2.7 million) would be used to build water facilities in 11 villages in the Aktobe region.

Additionally, in April, 2.5 billion KZT (approximately $4.8 million) was allocated for the reconstruction of the main water pipeline in Turkestan region. These efforts are expected to significantly improve water supply for residents of several rural settlements.

The Ministry of Education also announced that 28 new schools will be built using funds recovered from corrupt officials, providing education to 22,000 children.

The initiative to use recovered assets for the development of social infrastructure highlights the tangible benefits of anti-corruption efforts, with the projects in Kosshy and Makinsk standing as prime examples of how returned funds can directly improve the lives of citizens.

28 Apr 2025

Central Asia, Uzbekistan, Local Politics, Kyrgyzstan, Kyrgyzstan Local Politics, Uzbekistan Local Politics

Uzbekistan and Kyrgyzstan Reach Deal to Share Chashma Water Spring

April 28, 2025
By Sadokat Jalolova

Uzbekistan and Kyrgyzstan have reached an agreement to jointly use the Chashma water spring, located along their shared border. According to Uzbekistan’s government portal, both countries have confirmed the main terms of the agreement, ensuring that Uzbek citizens can access the spring freely. They also agreed not to undertake any actions that would hinder full use of the spring by citizens of either side.

The agreement was reached during a meeting held in Tashkent on April 24, led by Uzbek Prime Minister Abdulla Aripov and Kyrgyz Deputy Prime Minister Kamchybek Tashiev. During the meeting, the delegations also approved a protocol concerning the final unsettled section of the border.

Both sides emphasized that the Chashma spring is a shared treasure of the Uzbek and Kyrgyz peoples. Under the agreement, Uzbekistan will have access to two-thirds of the spring’s water. Any activities that could impact the quantity or quality of the water must be coordinated with the Uzbek side.

The two countries also agreed to finalize and sign a comprehensive agreement on the joint use of the Chashma spring and the final demarcation of the state border as soon as possible. The talks were praised for helping to ease border crossings for citizens and goods. Both sides stressed the need to promptly update and sign a protocol to amend the 2004 agreement on border checkpoints to make cross-border travel more convenient for citizens.

The delegations agreed to convene another meeting of the working groups soon. At the conclusion of the talks, a protocol summarizing the agreements was signed.

The Chashma spring has been a sensitive issue in the past. In May 2020, a conflict erupted during a joint irrigation canal cleaning operation at the spring, resulting in injuries. According to Uzbekistan’s Foreign Ministry, 187 Uzbeks were injured, while Kyrgyzstan’s Health Ministry reported that 25 individuals were hospitalized.

28 Apr 2025

International Affairs, Home, Uzbekistan, Tajikistan International Affairs, Turkmenistan, Turkmenistan International Affairs, Tajikistan, Kyrgyzstan International Affairs, Kyrgyzstan, Kazakhstan International Affairs, Kazakhstan, Features, Uzbekistan International Affairs

China and Central Asia Deepen Ties at Almaty Foreign Ministers’ Meeting

June 12, 2025
By Vagit Ismailov

The sixth meeting of foreign ministers in the “Central Asia-China” format was held in Almaty, attended by the foreign ministers of Kazakhstan (Murat Nurtleu), China (Wang Yi), Kyrgyzstan (Jeenbek Kulubaev), Tajikistan (Sirojiddin Muhriddin), Uzbekistan (Bakhtiyor Saidov), and a representative of Turkmenistan.

The main topics of discussion included strengthening political dialogue, expanding trade and economic ties, enhancing transport interconnectivity, and jointly countering global challenges. The ministers also addressed sustainable development and environmental security, outlining steps to improve the architecture of multilateral cooperation based on the principles of equality and mutual respect.

A key item on the agenda was preparation for the second China-Central Asia Summit scheduled for this year. The foreign ministers engaged in in-depth political coordination and exchanged views on expanding cooperation across various fields.

Challenges of Globalization and China’s Position

Chinese Foreign Minister Wang Yi expressed concern over growing trends of anti-globalization and protectionism. He criticized the United States for launching a “tariff war” against more than 180 countries, stating that it had undermined international trade rules and the stability of the world economy.

“China will consistently promote a high degree of openness, share opportunities with the world, and take responsibility for upholding international norms,” Wang Yi emphasized.

China proposed five areas for deepening cooperation with Central Asia: building political trust, promoting trade and investment, improving cooperation mechanisms, jointly celebrating historical anniversaries, and developing humanitarian ties.

Positions of the Central Asian Countries

The Central Asian foreign ministers highly supported China’s proposal to build a “community of common destiny” and expressed intentions to intensify joint efforts under the Belt and Road Initiative.

Particular attention was paid to facilitating trade, enhancing transportation connectivity, boosting industrial investment, and promoting agricultural development. The ministers reaffirmed their commitment to combating the “three forces of evil”, terrorism, extremism, and separatism and to strengthening cooperation within the United Nations framework.

A joint communiqué was adopted following the meeting, reaffirming the parties’ commitment to good-neighborliness, sustainable development, and deepening partnership.

Kazakhstan at the Center of Integration Processes

Kazakhstan’s Foreign Minister Murat Nurtleu highlighted that the leaders of Central Asian countries had set clear guidelines for cooperation in trade, energy, transport logistics, education, and science.

“In 2024, trade turnover between Central Asia and China reached a record $95 billion, with Kazakhstan accounting for 46% of that total,” Nurtleu said.

He noted that combining the region’s potential with China’s economic opportunities paves the way for a new architecture of strategic partnership. Plans to launch tourist railway routes between China and Central Asian countries were also discussed, and 2025 was declared the Year of Tourism of Uzbekistan in China.

Bilateral Meetings on the Margins of the Event

On the sidelines of the forum, Wang Yi held separate meetings with his counterparts from Kyrgyzstan, Tajikistan, and Uzbekistan.

With Kyrgyz Foreign Minister Jeenbek Kulubaev, Wang discussed expanding practical cooperation and accelerating the China-Kyrgyzstan-Uzbekistan railway project. Talks with Tajik Foreign Minister Sirojiddin Muhriddin focused on strengthening strategic partnership and promoting initiatives within the Belt and Road framework. With Uzbek Foreign Minister Bakhtiyor Saidov, discussions centered on intensifying cooperation in key areas and maintaining close coordination in international affairs.

According to the meeting participants, China continues to play a stabilizing role amid global instability, and the Central Asia-China format has proven effective in promoting regional development and security. Participants emphasized their commitment to regular meetings and to further developing the format to address global challenges.

28 Apr 2025

Central Asia, Environment, Kazakhstan Environment, Kazakhstan

Water Level in Lake Balkhash Steadily Rising

April 28, 2025
By Sergey Kwan

Over the past year, the water level in Lake Balkhash has risen by 0.12 meters, and the volume of water has increased by 2 billion cubic meters, according to Kazakhstan’s Ministry of Water Resources and Irrigation.

Located 175 miles northwest of Almaty, Kazakhstan’s largest city, Lake Balkhash is the world’s fifteenth-largest lake.

In May 2024, reports indicated that Balkhash’s water level had risen by 0.23 meters since the start of the year, largely due to increased rainfall and snowmelt floods during spring. Since the beginning of 2025, 3.8 billion cubic meters of water have been released from the Kapchagay reservoir in Almaty region into Lake Balkhash.

The lake’s water volume largely depends on the transboundary Ili River, which originates in China and supplies about 70% of Balkhash’s inflow. The river’s flow is regulated by the Kapchagay reservoir. This year, Lake Balkhash is expected to receive a total of 12 billion cubic meters of water from the reservoir.

According to Minister of Water Resources and Irrigation Nurzhan Nurzhigitov, the ministry will meet with French experts next week to begin preparations for a master plan to conserve Lake Balkhash through 2040.

The Times of Central Asia previously reported that in December 2024, Kazakhstan’s Ministry of Water Resources and Irrigation signed a cooperation agreement with the French Development Agency (AFD) and the French Geological Survey (BRGM, Bureau de Recherches Géologiques et Minières) to preserve Lake Balkhash.

Under the agreement, the French side will allocate a grant of 1.35 million euros to Kazakhstan’s Ministry of Water Resources and Irrigation to support the development of sustainable water management practices for the lake. The project includes a comprehensive study of the Lake Balkhash basin and the creation of a long-term preservation plan extending through 2040.