ministry of finance - The Times Of Central Asia

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Healthcare Reform

Kazakh Government Transfers Control of Controversial Medical Fund to Ministry of Finance

The Kazakh government has restructured the management of the Social Medical Insurance Fund (SMIF), transferring oversight of its operations to the Ministry of Finance. The decision was formalized by Prime Minister Olzhas Bektenov following a comprehensive audit of the fund’s financial activities conducted over the past month. The SMIF serves as the principal operator of Kazakhstan’s Compulsory Social Medical Insurance (CSMI) system. It collects contributions from employees, employers, and the state, then allocates these funds to medical institutions based on the volume of services rendered. However, the fund’s operations have faced sustained public and parliamentary criticism. In January 2025, members of parliament declared that the SMIF had lost the public’s trust and called for tighter oversight of its expenditures. Delayed Audit and Financial Irregularities Despite growing concerns, a large-scale audit had long been postponed. It was not until December 2025 that the Prime Minister tasked the Ministry of Finance with analyzing the fund’s financial flows. Finance Minister Madi Takiev presented the audit’s findings last week. According to the government press service, the results raised serious concerns about the overall effectiveness of the country’s healthcare financing model. Despite a steady rise in expenditures, the Ministry of Finance found that SMIF’s efficiency had not improved. Since 2020, the fund’s investment income totaled $1.1 billion, including $383 million in 2025 alone. A significant portion of these funds, however, was not allocated toward medical services, and instead accumulated in the fund’s reserves. Overbilling and Digital System Failures An IT audit of the healthcare information system revealed extensive violations in service reporting. These included billing for fictitious patients, services provided without medical necessity, and instances of double financing. Numerous cases documented implausibly high volumes of procedures performed within short timeframes. Several high-profile anomalies stood out. In some reports, medical services were recorded for individuals who were deceased at the time. In another case, minors were allegedly prescribed more than a thousand medications in a single day. Tax authorities also conducted a desk audit of the directors of medical institutions, comparing declared incomes with actual property holdings. Transition to Centralized Oversight In response to the audit, Bektenov ordered that all materials be forwarded to law enforcement agencies for further investigation. This marks the effective dismantling of SMIF’s former autonomous governance model in favor of centralized control by the Ministry of Finance. The move comes amid rising fiscal pressure on the healthcare system. In 2026, the government will continue to fund medical insurance premiums for socially vulnerable groups. As previously reported by The Times of Central Asia, the state will finance insurance coverage for over one million unemployed citizens.

Marketplace

Kazakhstan to Block Foreign Marketplaces for Unpaid Taxes

Foreign online platforms that do not complete conditional VAT registration and begin paying taxes in Kazakhstan by January 1, 2026, will be blocked in the country, according to Edil Azimshayyk, head of the VAT Administration Department at the State Revenue Committee under the Ministry of Finance. Speaking at a briefing in Astana, Azimshayyk said a new mechanism, conditional VAT registration for foreign companies, will take effect at the beginning of 2026. Under this system, the tax authorities will create a registry of foreign companies liable for VAT. The new rules will primarily target foreign suppliers of goods, services, and works that operate in Kazakhstan’s digital marketplace. To register, a foreign company must submit a confirmation letter containing its corporate details to Kazakhstan’s tax authority within one month of receiving its first payment from a buyer in Kazakhstan. The date of this initial payment will determine when the company is recognized as a VAT payer. Once registered, these companies will be required to pay VAT on a monthly basis. “We will send them notifications requiring registration,” Azimshayyk stated. “However, blocking their banking operations is not applicable, as they do not open accounts in Kazakhstan. Instead, if they fail to comply with the registration notification, access to their online platforms will be suspended.” The State Revenue Committee, in cooperation with the National Bank and commercial banks, will identify non-compliant companies by analyzing payments made by Kazakhstani citizens to foreign marketplaces. The VAT rate for such foreign platforms will also increase from 12% to 16% starting in 2026. Kazakh companies that are not yet registered for VAT will likewise receive notifications and be given 30 working days to comply. “If the notification is ignored, expenditure transactions on the taxpayer's bank accounts will be suspended. This restriction will be lifted once the company completes registration,” Azimshayyk added. As previously reported by The Times of Central Asia, foreign online purchases in Kazakhstan totaled $1.3 billion in 2023, representing approximately 20% of the country’s total online sales. Overall e-commerce volume exceeded $4.8 billion, accounting for 13% of total retail trade. The Kazakh government aims to raise the share of e-commerce in total retail trade to 18.5% by 2029 and 20% by 2030.

Entrepreneurship

Kazakhstan’s Finance Ministry Cracks Down on Widespread Tax Evasion Among Small Businesses

Kazakhstan’s Ministry of Finance has identified more than 260,000 entrepreneurs suspected of underreporting taxable income, Finance Minister Madi Takiyev said during a recent government meeting. According to Takiyev, in 2024, around 17,000 cash registers across the country failed to issue any receipts, while 260,000 taxpayers consistently reported either a single daily transaction or identical revenue amounts. However, enforcement efforts appear to be paying off, with 70,000 businesses now issuing receipts properly. The minister noted that tax evasion schemes remain widespread, including the mass registration of multiple companies at the same address. Currently, around 20,000 firms are registered at 3,576 locations, collectively owing over 60 billion KZT ($110 million) in unpaid taxes. Takiyev reported that the shadow economy declined slightly in 2024, accounting for 16.7% of GDP, a marginal improvement from the previous year. He highlighted notable progress in trade, education, and agriculture, supported by new digital tools such as Smart Data Finance, which uses artificial intelligence to detect tax evasion. The system currently integrates data from 74 sources, with 30 more expected to be added by the end of the year. Biometric identification has also played a role in strengthening compliance, helping authorities block fake invoices worth over 33 billion KZT ($60 million). Meanwhile, the E-Tamga system has processed 250 million electronic invoices and 500 million payments, potentially adding up to 100 billion KZT ($182 million) in annual tax revenue. To combat illicit trade, the authorities seized more than 1 million liters of alcohol, 6.6 million cigarette packs, and 37,000 tons of petroleum products in 2024, preventing estimated tax losses of over 7 billion KZT ($12.7 million). As The Times of Central Asia previously reported, Kazakhstan’s new Tax Code, raising the value-added tax (VAT) from 12% to 16%, is set to take effect in 2025.