• KGS/USD = 0.01144 0%
  • KZT/USD = 0.00200 0%
  • TJS/USD = 0.09163 -0.11%
  • UZS/USD = 0.00008 0%
  • TMT/USD = 0.28571 0%
  • KGS/USD = 0.01144 0%
  • KZT/USD = 0.00200 0%
  • TJS/USD = 0.09163 -0.11%
  • UZS/USD = 0.00008 0%
  • TMT/USD = 0.28571 0%
  • KGS/USD = 0.01144 0%
  • KZT/USD = 0.00200 0%
  • TJS/USD = 0.09163 -0.11%
  • UZS/USD = 0.00008 0%
  • TMT/USD = 0.28571 0%
  • KGS/USD = 0.01144 0%
  • KZT/USD = 0.00200 0%
  • TJS/USD = 0.09163 -0.11%
  • UZS/USD = 0.00008 0%
  • TMT/USD = 0.28571 0%
  • KGS/USD = 0.01144 0%
  • KZT/USD = 0.00200 0%
  • TJS/USD = 0.09163 -0.11%
  • UZS/USD = 0.00008 0%
  • TMT/USD = 0.28571 0%
  • KGS/USD = 0.01144 0%
  • KZT/USD = 0.00200 0%
  • TJS/USD = 0.09163 -0.11%
  • UZS/USD = 0.00008 0%
  • TMT/USD = 0.28571 0%
  • KGS/USD = 0.01144 0%
  • KZT/USD = 0.00200 0%
  • TJS/USD = 0.09163 -0.11%
  • UZS/USD = 0.00008 0%
  • TMT/USD = 0.28571 0%
  • KGS/USD = 0.01144 0%
  • KZT/USD = 0.00200 0%
  • TJS/USD = 0.09163 -0.11%
  • UZS/USD = 0.00008 0%
  • TMT/USD = 0.28571 0%
18 February 2025

Viewing results 1 - 6 of 5

Kyrgyzstan Reports Decrease in Shadow Economy

Kyrgyzstan’s non-observed (shadow) economy, excluding the agricultural sector, accounted for 19.2% of GDP in 2023, marking a 1% decrease from 2022’s 20.2%, according to the latest data from the National Statistical Committee. The Committee attributes this improvement primarily to reductions in shadow activities within key sectors: wholesale and retail trade and motor vehicle repair by 0.5%, construction by 0.4%, and transportation and cargo storage by 0.2%. Historical data reveals a steady decline in the shadow economy’s share of GDP over recent years, estimated at 20.4% in 2021, 20.1% in 2020, and 22.8% in 2019. Shadow economic activities in Kyrgyzstan are concentrated in sectors such as trade, car repair, transportation, construction, processing industries, hospitality, and various services. Discrepancies persist, however, in shadow economy estimates. In January 2024, Minister of Economy and Commerce Daniyar Amangeldiev noted that international financial institutions assessed Kyrgyzstan’s shadow economy as comprising 60% to 70% of GDP. He explained this divergence by citing differences in methodologies used by the National Statistical Committee and international organizations to calculate the informal economy's size. Although the National Statistical Committee has yet to publish its shadow economy assessment for 2024, Minister Amangeldiyev recently highlighted the positive impacts of a shrinking shadow economy. He credited it, alongside growing trade volumes, with contributing to Kyrgyzstan’s GDP growth last year. For context, the U.S. Department of Commerce’s International Trade Administration estimates Kyrgyzstan’s informal economy at 25% to 72% of GDP, underscoring the challenge of accurately quantifying this sector.

Every Third Kazakhstani Works Informally or Hides Their Income

Approximately one-third of working Kazakhstanis are employed informally, lacking social guarantees, labor protections, and pensions. This is according to the research “Features of Labor Market and Employment in Kazakhstan” by Adam Research. The findings, analyzed by the Energyprom agency, shed light on the scope of informal employment in the country. The survey revealed that 36.4% of respondents acknowledged working in the shadow economy. This figure is higher among men (37.6%) than women (34.9%). Informal employment is categorized into three main types: Work without a labor contract: 16.6% Shadow entrepreneurship: 13.6% Part-time work without registration: 6.2% Young people and retirees are disproportionately represented in these informal sectors. The study, conducted via telephone survey of adults in all 17 regions of Kazakhstan, found that southern areas like the Turkestan and Almaty regions, along with Shymkent, had the highest rates of informal employment. Conversely, East Kazakhstan and Ulytau regions recorded the lowest rates. Informal workers are often individuals with secondary education working outside their specialty. Their earnings vary widely: Those without labor contracts typically earn up to 100,000 tenge ($190) per month. Shadow entrepreneurs may earn over 600,000 tenge ($1,130). Many struggle financially. Among respondents paid “in envelopes,” nearly 27% reported insufficient income for basic necessities. The Bureau of National Statistics of Kazakhstan reported 1.2 million informally employed citizens in 2023. Of these: 682,500 worked in legal enterprises without formal registration. 473,200 were employed in the informal sector without patents or tax payments. This group constitutes 12.8% of Kazakhstan's total employed population. Labor Minister Svetlana Zhakupova identified informal employment as the second most significant labor market challenge, after job scarcity. She highlighted discrepancies between official labor remuneration fund data and pension savings. In 2023, the labor remuneration fund was valued at 38 trillion tenge, yet pension contributions accounted for only 20 trillion tenge. Additionally, labor remuneration makes up just 30% of Kazakhstan’s GDP, significantly lower than the OECD average of 50%. The largest discrepancies were observed in the trade, agriculture, and real estate sectors.

Kazakhstan Leads Central Asia in Anti-Money Laundering Efforts

The Basel Anti-Money Laundering Index (AML) has been released. It offers a comprehensive assessment of global efforts to combat money laundering. The index evaluates the risk of money laundering and financial crime across countries and regions, using 17 indicators across five domains to identify key factors that can heighten vulnerability. The indicators are updated annually and reviewed by an independent panel of experts to ensure relevance, methodology integrity, and access to current data. The Index does not measure the actual volume of money laundering activity. Instead, it focuses on the risk factors, scoring countries on a scale from 0 to 10 where 10 represents the highest risk and 0 the lowest. The Times of Central Asia examined this year’s ratings, focusing on the performance of Central Asian nations: Kazakhstan achieved a notable ranking of 111th out of 164 countries, with a score of 4.65. Uzbekistan followed, ranking 81st with a score of 5.27, while Kyrgyzstan placed 45th with 5.95 points. Tajikistan ranked 30th, scoring 6.45, and Turkmenistan recorded the region’s worst result, ranking 23rd with 6.71 points. Globally, the best results were observed in San Marino (2.96), Iceland (3.00), and Finland (3.07).

Kyrgyzstan’s President Declares Own Multi-Million Dollar Property as Part of Asset Legalization

The President of the Kyrgyz Republic, Sadyr Japarov has said that he wants top business people and wealthy citizens to repatriate their assets to Kyrgyzstan instead of storing it abroad - which is why he has decided to start with himself. Last summer, Kyrgyzstan adopted a law on legalization - or declaring assets to the government - of property. According to official statements, its main goal is to transition the property and income of individuals from the shadow economy into legal economic activity through voluntary declaration of assets. The law stands until July 1st, 2024. "Voluntary legalization of and amnesty [for] assets will allow [the nation] to bring some shadow assets into legal turnover, which, as a consequence, will contribute to an increase in legal economic activity. According to the National Statistical Committee of Kyrgyzstan, the shadow economy accounts for 21% of the republic's GDP, and according to unofficial data, the shadow economy accounts for 40% of the republic's GDP. In this regard, the voluntary legalization and amnesty of assets of individuals is part of the preparatory stage of the transition to universal declaration," reads the law's background note. Image: Japarov Facebook post The president noted that all large and medium-sized business people used to register their property in someone else's name to avoid paying taxes to the state, and he was among them because he entered into politics from business. He lamented the fact that the richest citizens still keep their billions in foreign banks. Under the law, authorities guarantee that of all tax declarations previously submitted to state agencies will not be subject to prosecution. This is to give assurance to anyone seeking amnesty that the state will honor current assessments of income and property that have been legalized. The document states that if the amount a person legalizes exceeds 100 million som ($1,100,000), the submitting citizen must pay a so-called declaration payment of one million som ($11,000) to the state. "The value of my property is about 20 million dollars. I paid one million som to the state for the purpose of legalization. This is required by law. I have no savings abroad, and if I had, I would have invested them in our banks," the president wrote. Japarov said he constructed a building in the center of the capital back in 2010, but because of political persecution by the previous authorities, he had to hide the fact the multi-story building belonged to him. Now, he has registered the building under his own name. The head of state stressed that based on the law, the authorities guarantee all citizens the safety of legalized capital: "There is no other goal. There will be no questions [put] to you." The president noted that he's the first to legalize his property, despite the fact that the law came into force more than six months ago. At the end of last year, Japarov also urged owners of markets and large retail outlets to transition their assets out of the shadow economy....

Kazakhstan Uses Income Declaration to Fight the Shadow Economy

Kazakhstan's third stage of universal income declaration is underway. As part of the current stage, declarations must be submitted by entrepreneurs, company founders and directors, and their spouses. In 2025 yet another new stage of declarations, will commence which will oblige all adult citizens to submit declarations. Currently, many entrepreneurs and small business owners use mobile transfers, which are intended for personal purposes. Such actions are illegal and violate the guidelines of the Entrepreneurial Code - Article 27, which stipulates that an entrepreneur may only use business accounts when carrying out commercial activities. It's specified in the law that mobile transfers and payments made for personal purposes are not taxable. Regarding taxation of individuals in Kazakhstan, every adult citizen is obliged to pay taxes to fund the budget. Currently, individuals pay taxes applicable to their wages. One tax and two mandatory contributions are withheld from an employee's official salary in Kazakhstan: Individual Income Tax (IIT); contributions for compulsory medical insurance (VOSMS); and mandatory pension contributions (MPC). Individual income tax (IIT) is levied on the income of employees and transferred to the state treasury by the employer. According to Article 322 of the Tax Code, such income includes wages and salaries. In addition, income classified as in-kind (transfer of goods, securities, provision of services to an employee, non-paid transfer of property, etc.) and material benefit (cancellation of debt to an employee, sale of goods to them, etc.) are subject to personal income tax. According to paragraph 1 of Art. 320 of the Tax Code, the individual income tax rate for all types of income is 10%. All Kazakhstan citizens who have a car are also subject to transportation tax. It includes excise tax on fuel and lubricants -- the larger the engine volume of the car, the higher the tax burden due to high consumption of fuel and lubricants; a vehicle tax -- the larger the engine displacement, the higher the tax burden; utilization fee, and fee for the initial registration of a motor vehicle. Real estate owned by citizens is also taxed in Kazakhstan. The amount of tax depends on one's type of property and is calculated for each object separately. The value of property for tax purposes is determined on the basis of a formula by multiplying several indicators: the base cost per square meter, which depends on the specific city or type of settlement; usable area of the property ( in sq. m.); a coefficient indicating the physical deterioration of the dwelling, which is determined by taking into account the age of the building from the date of commissioning and depreciation; a functional wear coefficient, which depends on the floor, location, amenities, engineering condition and type of heating; a zoning coefficient, which takes into account the location of the property in a particular community; and the MRP change factor, which shows how much this indicator has increased compared to the previous year.