e-Commerce - The Times Of Central Asia

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Foreign E-Commerce Platforms in Central Asia Face New Tax Burdens

Local business owners argue that foreign marketplaces enjoy unfair competitive advantages. To address this, Central Asian authorities plan to impose new tax requirements. For consumers, this move could mean higher inflation. Unequal Conditions In February, members of Kazakhstan’s Mazhilis highlighted that foreign marketplaces pay four times less in taxes than their local counterparts. Deputies from the Ak Zhol party, which advocates for business interests, have proposed requiring foreign e-commerce platforms to register with Kazakhstan’s tax authorities and pay value-added tax (VAT) on revenue from local buyers. This proposal targets major marketplaces such as Temu, Amazon, and AliExpress. In 2023, foreign marketplaces contributed just 4.8% of their turnover to Kazakhstan’s treasury, leading to an estimated budget shortfall of tens of millions of dollars. By contrast, Kazakhstani marketplaces face a significantly higher fiscal burden, paying an average of 16.3% in taxes. Local entrepreneurs using domestic platforms may pay up to 62% in various fees and levies, lawmakers claim. They argue that this imbalance undermines the competitiveness of local businesses, leading to factory closures and job losses. A study by the Alliance of Technological Companies Qaztech found that 20% of Kazakhstani consumers currently shop exclusively on foreign platforms. Without government intervention, this share could exceed 50% by 2029, resulting in substantial budgetary losses. “Pay Up or Leave” In January, Prime Minister Olzhas Bektenov proposed increasing VAT while reducing social tax and pension contributions for employers. The plan includes raising the basic VAT rate to 16%, though certain businesses may receive exemptions. In March, National Economy Minister Serik Zhumangarin confirmed that the VAT increase would also apply to online marketplaces. “We set rules and laws, and marketplaces must either comply or exit our market. As far as I know, Temu and Pinduoduo have already conditionally registered here and are VAT payers,” Zhumangarin stated. He emphasized that the government is not imposing a special tax on specific platforms but rather enforcing equal treatment across all e-commerce players. Zhumangarin acknowledged that the VAT hike might cause a short-term inflationary spike, estimating an additional 3% increase. Overall inflation, he noted, could return to double digits, reaching 12–14%. Uzbekistan Follows Suit Uzbekistan is also moving to curb foreign e-commerce dominance. Beginning March 20, the country will restrict access to Temu unless the platform registers for tax purposes. Authorities argue that some foreign marketplaces evade national tax regulations, creating unfair competition for local businesses. Uzbek analyst Timurmalik Elmuradov suggests that Temu has two options: establish a subsidiary in Uzbekistan or register as a VAT payer. The Chinese platform’s estimated monthly sales in Uzbekistan amount to $8-9 million. Online marketplaces are a relatively new phenomenon in Uzbekistan, with Temu operating in the country for only about six months. Should foreign e-commerce platforms withdraw, the cost of imported goods could rise by 10-12%. Meanwhile, Kazakhstan has around 50 domestic online marketplaces, though they struggle to compete with larger foreign rivals. While Chinese, Russian, and Western platforms offer a vast selection and lower prices, local businesses emphasize faster and more reliable delivery.

Kazakhstan and China Set to Expand Trade and E-Commerce

Trade between Kazakhstan and China continues to grow, reaching $43.8 billion in 2024, according to China’s General Administration of Customs. Kazakhstan’s exports to China amounted to $15.8 billion, marking a 9% increase from the previous year. These figures were announced by Han Chunlin, China’s newly appointed ambassador to Kazakhstan, during a meeting with Kazakh Minister of Trade and Integration Arman Shakkaliyev on February 8. “This trend confirms our steady progress toward the ambitious goal of doubling bilateral trade turnover in the near future,” the ambassador stated. Strengthening Trade and E-Commerce Cooperation The meeting focused on expanding Kazakh-Chinese trade and economic cooperation, with particular emphasis on e-commerce platforms. Shakkaliyev highlighted that bilateral trade reached a historic high in 2024 and reaffirmed Kazakhstan’s commitment to diversifying its exports while expanding the range of products supplied to China. He also announced plans for trade and economic missions in 2025, alongside Kazakhstan’s participation in major exhibitions in China. A key discussion point was the development of online trade through leading Chinese e-commerce platforms, including JD.com, Alibaba, and Douyin. Kazakhstan’s Growing Presence in Chinese E-Commerce Alibaba: Launched in 2022, Kazakhstan’s dedicated section on Alibaba now includes 290 domestic companies offering over 7,500 products. Total sales on the platform have already surpassed $260 million. JD.com: In 2023, JD.com opened a Kazakhstan section, featuring over 60 products. Revenue from Kazakhstani goods sold on the platform grew from RMB 1 million in 2023 to RMB 1.3 million in 2024. Kazakhstan’s e-commerce industry has seen rapid growth in recent years. According to the Ministry of Trade and Integration, online transactions from January to November 2024 totaled approximately 3.2 trillion KZT (over $6 billion), accounting for 14.5% of total retail trade. As Kazakhstan strengthens its trade ties with China, digital commerce is expected to play an increasingly important role in bilateral economic relations.

Kazakhstan’s Digital Exports Expand

Kazakhstan exported $471 million worth of IT services to 95 countries during the first nine months of last year, according to Zhaslan Madiyev, Minister of Digital Development, Innovation and Aerospace Industry (MDDIAI). The primary driver of export revenue in Kazakhstan's IT services market is Astana Hub, the largest international technology park for IT startups in Central Asia, located in the country's capital. Astana Hub is home to over 1,500 companies, including 400 international firms. In 2024, its total revenue reached 620 billion KZT ($1.1 billion), with export revenue amounting to 227 billion KZT ($428 million) across 92 countries. Additionally, the products of JSC "National Information Technologies" (NIT JSC), the operator of Kazakhstan’s “e-government” infrastructure, have also entered global markets. According to Madiyev, NIT JSC’s main exported products include Smart Data Ukimet, Smart Bridge, and Gov.kz: Smart Data Ukimet: An information-analytical platform designed for the secure collection, storage, and analysis of data from government information systems. Smart Bridge: A platform that simplifies integration processes between government agencies and private businesses through a "service showcase" model. Gov.kz: A unified platform for the online resources of government agencies. The export of Kazakhstan’s digital public services (GovTech) reached $2.7 million, with these solutions currently supplied to Tajikistan, Togo, and Sierra Leone. In addition to GovTech, Kazakhstan’s IT exports also include software, computer games, fintech solutions, and marketplaces. Among the largest exporters are five software developers, three computer game companies, one fintech firm, and one marketplace. “Most of the major exporters are foreign companies that have relocated to Kazakhstan, creating new jobs in major cities and regions, as well as contributing to export revenue,” said Madiyev. Kazakhstan has made significant strides in developing its IT infrastructure. The country now boasts 20 regional IT hubs that work closely with Astana Hub, fostering innovation across the nation. Furthermore, Kazakhstan is establishing an international network of IT hubs by opening IT offices in the United States, Saudi Arabia, Singapore, and the United Kingdom. “Kazakhstani startups now have foreign infrastructure to attract investment and expand their export markets,” said Madiyev. The minister also announced the launch of a fund of venture capital funds under the jurisdiction of the International Financial Center Astana (MFCA), based at Astana Hub. This fund, with an expected capital of $1 billion, will finance IT startups in Kazakhstan. As previously reported by The Times of Central Asia, Kazakhstan is home to 12 regional IT hubs that are actively contributing to the country’s growing digital economy.

eBay Officially Registers for Tax Purposes in Uzbekistan

The American e-commerce giant eBay has officially registered for tax purposes in Uzbekistan, according to UzDaily. As a result, eBay will now pay value-added tax (VAT) on its services in the country. Other global companies, including Netflix, Amazon, Google, Apple, and Zoom, are also registered with Uzbekistan’s special tax office for foreign digital companies. In total, 64 foreign companies are currently complying with the country’s VAT requirements. The Tax Committee of Uzbekistan reported that 61 foreign companies providing electronic services contributed 101.9 billion UZS (approximately $7.89 million USD) in taxes to the national budget between January and September 2024. This represents a 2.1-fold increase compared to the same period in 2023, highlighting the growing importance of foreign digital service providers in Uzbekistan's economy. In December 2024, Uzbekistan introduced new regulations requiring all companies providing e-commerce services to register as legal entities in the country. Despite their tax registrations, major platforms like eBay and Amazon have not yet established physical offices in Uzbekistan, raising questions about their long-term plans for expanding operations in the local market. In related news, The Times of Central Asia previously reported that Binance, one of the world’s largest cryptocurrency exchanges, will officially begin offering services to users in Uzbekistan. This move underscores the country’s growing focus on integrating global digital platforms into its economy. eBay’s registration for VAT in Uzbekistan marks another step in the country’s efforts to regulate and tax the growing digital economy. As more global companies comply with Uzbekistan’s tax requirements, questions remain about whether these platforms will deepen their presence in the country by establishing local offices.

Foreign Online Marketplaces to Be Registered in Kazakhstan

Kazakhstan’s Minister of Trade and Integration, Arman Shakkaliyev, has proposed introducing regulations requiring foreign online marketplaces operating in the country to register on a dedicated electronic platform. The proposal was discussed during a government meeting on e-commerce development held on January 14. As outlined by Shakkaliyev, the mandatory conditions for these platforms would include: Compliance with product safety standards; Measures to combat counterfeit products; Protection of consumer rights and personal data; and Adherence to tax and customs transparency requirements. Addressing Consumer Complaints The proposed measures aim to address a growing number of complaints from Kazakh citizens about foreign online trading platforms. Many of these platforms operate outside of Kazakhstan's jurisdiction, making it difficult - if not impossible - for customers to return or exchange goods due to geographic distances. Furthermore, goods purchased through foreign marketplaces often lack certification in Kazakhstan, raising concerns over product safety and quality. The Rise of E-Commerce in Kazakhstan In 2023, purchases on foreign online marketplaces in Kazakhstan totaled $1.3 billion, accounting for about 20% of the country’s total online sales. The sector continues to grow, with new foreign platforms entering the market. Notably, Russian marketplaces Ozon and Wildberries plan to establish three fulfillment centers in Astana and Almaty in 2024, with a combined area of 291,000 square meters. Kazakhstan’s e-commerce industry has witnessed rapid growth in recent years. According to the Ministry of Trade and Integration, e-commerce transactions from January to November 2024 amounted to approximately 3.2 trillion KZT (over $6 billion), representing 14.5% of the total retail trade and creating over 300,000 jobs. The government aims to increase e-commerce's share in total retail trade to 18.5% by 2029. Comparative Trends and Local Initiatives The Times of Central Asia previously reported that in 2023, Kazakhstan's e-commerce volume exceeded 2.2 trillion KZT ($4.8 billion), accounting for 13% of all retail trade - an increase of 0.5% compared to the previous year. In addition to regulating foreign platforms, Kazakhstan is fostering its domestic e-commerce sector. Recently, a new local online marketplace, Teez, was launched, with investments totaling $50 million. Teez boasts its own infrastructure, further strengthening the country's digital economy.

Uzbekistan Introduces New Rules for E-Commerce Platforms

The Cabinet of Ministers of Uzbekistan has issued a new decision titled “On Measures to Further Develop the E-Commerce Sector in Uzbekistan”, introducing updated regulations for e-commerce operators, including electronic trading platforms, order aggregators, and digital streaming service providers. Under the new regulations, only legal entities registered as residents of Uzbekistan can operate as e-commerce providers. This includes platforms that facilitate electronic transactions, such as marketplaces, aggregators, and streaming services. Entities or individual entrepreneurs that merely provide information about goods, services, or digital products without engaging in electronic contracts or transactions are not classified as e-commerce operators under these rules. From July 1, 2025, e-commerce operators in Uzbekistan must adhere to the following conditions: Legal Registration: Operators must be registered as legal entities in Uzbekistan. Compliance with Laws: Operators are required to follow legislation related to e-commerce, personal data protection, copyright, consumer rights, and advertising. Transparency: Upon request, they must provide information about their activities to authorized bodies free of charge. Retail Trade Rules: Operators must comply with retail trade regulations. Operational Standards: They must maintain an information system capable of ensuring the effective provision of services to e-commerce participants. These new measures are part of Uzbekistan’s broader efforts to regulate and encourage growth in its rapidly expanding e-commerce sector. Meanwhile, The Times of Central Asia previously reported that Russian e-commerce giant Wildberries is planning to enter the Tajikistan and Turkmenistan markets. Wildberries currently operates in Uzbekistan, Kyrgyzstan, Belarus, Kazakhstan, and Russia, offering a wide range of products, including clothing, footwear, electronics, and home furnishings. By setting clear rules for e-commerce operators, Uzbekistan aims to create a more structured and reliable digital marketplace, ensuring transparency, consumer protection, and compliance with international standards.