Kazakhstan’s ruling Amanat party has called on the government to revise its proposed tax reforms, particularly those affecting the value-added tax (VAT). The party is pushing to double the planned threshold for mandatory VAT registration, warning that the current proposal could harm small and medium-sized businesses.
Under current law, businesses must register for VAT if their annual turnover exceeds 78.6 million KZT (approximately $152,000). The government’s draft reform proposes to lower this threshold to 15 million KZT (around $29,000). It also includes raising the basic VAT rate from 12% to 16%, introducing a zero rate for agricultural producers, a 10% rate for selected industries, and gradually applying VAT to the healthcare sector. The reform also proposes eliminating 128 tax exemptions worth more than 1.3 trillion KZT.
A progressive personal income tax is also under discussion. With a base rate of 10%, the government suggests introducing a 15% rate for annual incomes exceeding 8,500 MRP (monthly calculation index), equivalent to over 33.5 million KZT. For 2025, the MRP in Kazakhstan is set at 3,900 KZT (about $7.50).
The draft Tax Code is scheduled for a first reading in the Mazhilis, Kazakhstan’s lower house of parliament, on Wednesday, April 9. On the eve of the session, government officials presented the proposals at an expanded meeting with Amanat’s parliamentary faction, which holds 62 of the 98 Mazhilis seats.
Amanat deputies voiced strong opposition to the proposed reduction in the VAT registration threshold, warning it could drive businesses into the informal economy. Instead, they urged the government to raise the threshold to at least 30 million KZT (approximately $58,000).
The party also proposed exempting 19 socially important food items from VAT to ease the financial burden on citizens. These items include flour, bread, pasta, eggs, buckwheat, rice, sugar, vegetable oils, various meats (such as beef and chicken), dairy products (milk, kefir, cottage cheese), staple vegetables (potatoes, carrots, onions, cabbage), and salt.
“Particular concern was expressed over proposals to apply VAT to healthcare and to tax financial services,” the party said in a statement. “Such measures would drive up prices and impose additional costs on the population, which is unacceptable under current conditions”.
As The Times of Central Asia previously reported, the government initially considered raising the VAT rate to 20%, but President Kassym-Jomart Tokayev rejected that proposal in favor of a more moderate increase.
