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Agriculture

Kazakhstan to Diversify Agricultural Crops for Higher Yields and Increased Profits

Kazakhstan will continue diversifying its agricultural crop areas this year as part of efforts to double gross agricultural output, Minister of Agriculture Aidarbek Saparov announced at a government meeting on February 11, focused on preparations for the upcoming sowing season. According to Saparov, Kazakhstan plans to sow crops on 23.8 million hectares in 2025, an increase of 518,000 hectares compared to 2024. The crop diversification program will cover approximately 1 million hectares, while the area dedicated to highly profitable crops will expand by 750,000 hectares. The area under oilseed crops will increase by 365,000 hectares, reaching 3.3 million hectares, including a 50,600-hectare expansion for sunflower cultivation, bringing it to 1.3 million hectares. Potato cultivation will grow by 14,900 hectares to reach 136,800 hectares, while buckwheat fields will expand by 41,500 hectares, bringing the total to 147,000 hectares. The sugar beet planting area will increase to 18,400 hectares, and forage crops will expand by 184,000 hectares, reaching 3.4 million hectares. Cotton will be sown on 135,200 hectares, while rice will cover 90,200 hectares. Kazakhstan will also continue to reduce its reliance on wheat monoculture. In 2025, grain crops will be sown on 16.6 million hectares, slightly down from 16.7 million hectares in 2024. Over the past two years, wheat cultivation has been reduced by nearly 730,000 hectares, including 159,000 hectares this year. According to Saparov, diversification will help mitigate risks associated with price fluctuations in agricultural markets. Oilseeds and legumes remain in high demand both domestically and internationally, with consistently strong prices. While the average price of wheat stands at 65,000 - 70,000 KZT per ton, export-oriented crops such as flax and rapeseed can fetch 200,000 KZT per ton or more. Beyond economic benefits, crop diversification contributes to soil health. Saparov highlighted that legumes, in particular, help enrich the soil with nitrogen, improving the yield of subsequent crops. This approach not only increases profitability but also enhances environmental sustainability.

Ecology

Uzbekistan Launches Eco-Friendly Program to Reward Green Lifestyles

Uzbekistan has introduced a new initiative to promote eco-friendly habits. A presidential decree has been adopted as part of the state program for implementing the 'Uzbekistan 2030' strategy during the country's 'Year of Environmental Protection and Green Economy'. The nationwide movement, One Million Green Families, aims to encourage sustainable living and raise environmental awareness. The program seeks to integrate eco-friendly habits into daily life through advocacy efforts and incentives. The initiative is based on several key principles: Promoting a healthy lifestyle through better nutrition, daily walks, and jogging Encouraging the use of green transportation, such as bicycles Reducing plastic waste Preventing food waste Using water, gas, and electricity more efficiently Sorting waste for recycling To support this initiative, the Ministry of Ecology, Environmental Protection, and Climate Change, along with the Ministry of Digital Technologies, will launch a digital platform in June. This platform will track participation and offer incentives to those who actively adopt eco-friendly practices. Citizens who demonstrate outstanding commitment to sustainable living will earn the title of "Eco-Active Citizen". Benefits include a 10% discount on public services and lower interest rates on consumer loans from state-owned banks. Families in which all adults achieve this status will be recognized as Green Families, and will have a chance to win one of 14 electric cars awarded annually through an open competition. The initiative also extends to local communities. Mahallas (neighborhoods) where at least half of the residents qualify as Green Families will compete in the Cleanest Mahalla and Greenest Mahalla contests. Winning communities will receive 500 million UZS ($38,500) to fund local infrastructure improvements, such as road repairs, energy-efficient lighting, playgrounds, green spaces, and waste management upgrades.

Tax

Kazakhstan Announces Differentiated VAT Rates

Kazakhstan’s Cabinet of Ministers has proposed a differentiated value-added tax (VAT) structure, with rates ranging from 0% to 16% and an intermediate rate of 10%. This announcement was made by Vice Minister of National Economy Azamat Amrin. The proposal comes after President Kassym-Jomart Tokayev rejected an earlier plan to increase the VAT rate to 20%. “We propose the following mechanism: a general VAT rate of 16%, full exemption from VAT for agricultural producers, and an intermediate rate of 10% for certain industries. Thus, the government's proposed differentiation consists of 16%, 10%, and 0% rates,” Amrin said during a meeting with business representatives in Astana. The government plans to determine which industries will qualify for the 10% VAT rate following consultations with the business community. Amrin also noted that agricultural VAT exemptions currently apply to peasant farms (family-labor associations), while larger legal entities in the sector pay about a third of all applicable taxes due to existing tax incentives. Now, the government is ready to abolish VAT for these larger agricultural enterprises as well to enhance the competitiveness of Kazakhstan’s agricultural products. Budget Implications of the VAT Reform Kazakhstan’s current general VAT rate stands at 12%. The government expects that raising it to 16% will generate an additional 4 - 5 trillion KZT ($7.8 billion - $9.7 billion) in annual tax revenues. In late January 2025, Minister of National Economy Serik Zhumangarin estimated that revising the VAT rate could bring in an additional 5 - 7 trillion KZT ($9.7 billion - $13.6 billion). At that time, authorities were considering a VAT increase to 20%, but late last week, President Tokayev publicly opposed such a sharp tax hike. Tokayev Calls for a Balanced Approach “It is necessary to explore different options, taking into account the specifics of various economic sectors,” Tokayev said during a meeting with representatives of Kazakhstan’s largest businesses. “I have not previously commented on this matter, as every word I say can be interpreted as a direct order due to my official status. However, I now want to make my position clear: the VAT rate should be differentiated. The rate proposed by the government was still too high,” the president stated. Tokayev emphasized the need for a balanced approach that supports businesses while also increasing budget revenues. “The state needs optimal solutions that, on the one hand, create favorable conditions and do not hinder business, and on the other hand, bring order to the tax system and ensure sustainable budget growth,” he added. Following the president’s remarks on Friday, February 7, the government revised its VAT reform plan, announcing the new differentiated rates on Monday, February 10. VAT Reform as Part of Kazakhstan’s Broader Tax Overhaul As The Times of Central Asia previously reported, the draft of Kazakhstan’s new Tax Code, which includes the VAT reform provisions, also proposes a differentiated corporate income tax (CIT) rate for banks. The aim is to encourage business lending by making it more financially attractive than consumer lending or investments in government securities.

Digitalization

Kazakhstan to Build Fiber-Optic Highway for Internet Traffic

On February 6, Kazakhstan’s Ministry of Digital Development, Innovation, and Aerospace Industry signed a memorandum of cooperation with Freedom Telecom Holding Ltd. to construct a fiber-optic highway and data centers for the transit and storage of international internet traffic. According to the ministry, the West-East national highway will significantly expand data transmission capacity and position Kazakhstan as a key hub for international internet traffic transit. The project aims to enhance connection speeds, improve data transfer efficiency, and establish an alternative route for internet traffic between Europe and East Asia. The hyper-highway is scheduled for completion in 2026. It is expected to attract major international clients, including IT firms, telecommunications companies, and financial institutions seeking fast and secure data transit. Kazakhstan views the hyper-highway and data center initiative as a strategic step toward strengthening its digital infrastructure. The project will boost Kazakhstan’s role in global internet traffic transit while establishing a robust and secure data storage network. The development will be financed through private investment. Freedom Telecom, a subsidiary of Freedom Holding Corp. (Kazakhstan), currently provides broadband internet access and open Wi-Fi in major cities across the country.

Digitalization

Uzbekistan Sets Digital Performance Targets for Ministers and Khokims

Uzbek President Shavkat Mirziyoyev has instructed the government to establish individual key performance indicators (KPIs) for each minister and khokim (local governor) to accelerate digitalization reforms. According to presidential spokesperson Sherzod Asadov, officials will not only be assigned specific KPIs but will also be required to meet strict deadlines for task completion. As an example, Mirziyoyev directed the State Committee for Tourism to develop a unified digital platform integrating hotel reservations, airline and rail tickets, museum and theater visits, and services for guides and interpreters. Another priority is expediting the issuance of electronic visas - the Ministries of Foreign Affairs and Justice have been tasked with reducing processing time to three days. The president emphasized that competitiveness in the service sector is directly linked to the level of digitalization across industries. However, not all agencies are meeting their targets. For instance, the Ministry of Transport has failed to launch an online ticketing system for all types of passenger transport, despite more than six months of efforts. Similarly, the Cadastral Agency has been slow in developing a unified register of real estate addresses. “Any leader who postpones digitalization acts against our policy of openness,” Mirziyoyev stated. A key topic at the meeting was the optimization of state services. The president noted that, over the past three years, some functions have been transferred to the private sector, including conducting exams and awarding qualification categories to realtors and appraisers, issuing certificates to tour guides, and performing mandatory technical inspections of specialized and agricultural equipment. This privatization trend will continue. By March 1 this year, 11 additional state services are expected to be handed over to private enterprises, followed by 18 more by October 1.

State Budget

Kazakhstan Explores Budget Cuts and Tax Reforms with Input from Elon Musk

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.