New Laws on Taxation and Social Benefits Come Into Effect

ASTANA – A number of new laws came into effect on Jan. 1, including laws raising taxes and increasing social benefits.

Owners of expensive, high-engine-capacity vehicles will pay more in taxes in 2014. Cars with engine capacities of more than 3,000 cubic centimetres produced or imported into Kazakhstan after Dec. 31, 2013, will pay a new rate based on monthly calculation index (MCI) on their cars according to engine size.

The rates for vehicles with engine volumes of 3-3.2 litres are 35 MCIs; from 3.2-3.5 litres, 46 MCIs and from 3.5-4 litres, 66 MCIs. The monthly calculation index at the end of 2013 was 1,731 tenge (US$11.20).

As of Jan. 1 of this year, cars with engine volumes of 4-5 litres will be taxed at 130 MCIs and of more than five litres at 200 MCIs. The tax exemption for war veterans or the equivalent for cars with engine volumes of more than four litres has now been abolished.

On Nov. 21, 2013, members of the Senate adopted the law “On amendments and additions to some legislative acts of Kazakhstan on the issues of taxation,” raising excise tax rates on alcohol and tobacco products. The amendments will provide for a gradual increase in the rate of excise tax on strong alcohol products from 500 tenge (about US$3.24) per litre to 1,600 tenge (US$10.36) per litre.

Excise taxes on tobacco products will be increased from 1,550 (about US$10) tenge to 5,000 tenge (US$32.37)  per 1,000 units or annually between 2014-2016.

The base rate for assessing property tax has also doubled, increasing from 30,000 tenge (US$194.25) to 60,000 tenge (US$388.50) per square metre in Astana and Almaty and from 18,000 tenge (US$116.55) to 36,000 tenge (US$233.10) per square metre in regional centres. Properties worth 150 million tenge (US$971,250) or more will see their tax rates double, to 2 percent. Earlier, this rate ranged from 0.05 percent for properties with an assessed value of up to 1 million tenge (US$6,475) up to 1 percent for property assessed at over 120 million tenge (US$777,000).

Land intended for housing or other buildings that is not being used for that purpose will see taxes increase tenfold.

Pensions for many recipients will increase by 9 percent this year.

Social disability and loss of breadwinner benefits will also be increased according to changes in the cost of living. Special benefits from special lists one and two and the monthly allowance for child care will also increase due to the increased size of the MCI. As of Jan. 1, MCI stands at 1,852 tenge (US$12).

A temporary, six-month ban on the export of certain types of petroleum products was also introduced on Jan. 1.

“In order to prevent a critical shortage and price increase for petroleum products on the domestic market, the government of Kazakhstan decides to introduce a six-month ban on the export of light distillates and products, kerosene, gas oil and other petroleum products, except for special petrol and home heating oil,” the governmental decree said.

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