ASTANA – Kazakh President Kassym-Jomart Tokayev emphasized the crucial role of tax reform in the country’s future, calling it the foundation of the state system and the key to fulfilling social obligations during the fourth meeting of the National Kurultai (Congress) on March 14 in Burabai.
Kassym-Jomart Tokayev. Photo credit: Akorda
Welcoming the participants, he noted that the members of the National Kurultai play a crucial role in the country’s modernization by uniting citizens around shared creative goals. From its inception, this platform has symbolized renewal, setting new standards for public dialogue.
Tokayev addressed tax reform, a topic that has sparked lively public debate. He underscored that the tax system forms the foundation of the entire state structure. Without sufficient funds in the budget, the government would be unable to fully carry out its functions, including fulfilling social responsibilities.
According to him, it is crucial to thoroughly explain to citizens the essence of decisions that are vital for the country’s development.
Photo credit: Akorda
“Not everyone is well-versed in economics or finance, and not everyone may understand the reasoning behind certain government actions. Therefore, it is necessary to communicate the meaning of the ongoing reforms in a clear and accessible manner to the public,” he said.
He stated that the government had introduced new approaches to tax reform and that the proposed measures were generally well-founded, as they took key economic and social factors into account.
Tokayev noted that a consensus already exists in professional circles and society about the necessity of increasing the value-added tax (VAT) rate. While some critical remarks have been made regarding the proposed VAT measures, he noted that such opinions do not reflect the actual situation.
He stated that while many countries do not take on significant social obligations for various reasons, in Kazakhstan, the social sector accounts for more than half of the national budget.
“Our state is socially oriented, so we will continue to invest in education and healthcare: this is our constitutional duty. Assistance should be provided only to those truly in need, however; abuses and scams are unacceptable. Therefore, non-priority expenses will be reduced, the need for this is obvious. The government must finally decide by the end of the year how such expenses should be optimized,” he said.
Tokayev pointed out that Kazakhstan’s various tax regimes, benefits and preferences had created a situation resembling a tax haven. He explained that two main groups of entrepreneurs had emerged: those who exploited loopholes in the legislation to reduce their taxable base and those who conscientiously paid all taxes. As a result, the second group of entrepreneurs, those who fully complied with tax obligations, became less competitive.
“The government has rightly highlighted the situation of business fragmentation aimed at tax evasion, a phenomenon that unfortunately persists. It must be acknowledged that this fragmentation was a result of gaps in legislation, an issue that was not adequately addressed by either the government or Parliament. (…) The situation urgently requires correction. Therefore, I call on the government and Parliament to make the necessary legislative changes immediately,” Tokayev said, assuring that the government would prioritize supporting honest, responsible and law-abiding entrepreneurs.
