Expert on key messages at Tokayev's meeting with businessmen

Tengrinews.kz - Popular expert Almas Chukin attended the meeting of President Kassym-Jomart Tokayev with entrepreneurs, revealed some details of the event, and drew attention to "very important signals."
VAT revision and economic modernization
According to Chukin, on February 7, about 60 businessmen attended the meeting. They made various proposals - from simple and real to abstruse and fantastic. Some asked for money, others - changes in the regulations.

"The whole point of the event was, obviously, in the final speech of the President. And it is interesting, since I was in the back row with the apparatus, I noticed that they had texts, which they carefully compared with what Tokayev said, and immediately began to write in words that were not on paper, and in two languages ​​at once. They wrote quite a lot, since the President did not just speak, sometimes he began to reason out loud on various issues," he says.

Almas Chukin noted in Tokayev's speech the order to review the approach to increasing VAT.
As the expert notes, a differentiated rate could mean 0% for agriculture and 5-10% for medicines and textbooks. Tokayev also called on the government not just to modernize the work, but to review it taking into account AI, new economic models, and breakthrough ideas, such as Elon Musk's approaches.
In addition, he was instructed to complete the return of assets. Chukin emphasized that two years of uncertainty hinders investment and there is no point in delaying it any further.
"If we do not put things in order with state finances, everything else is not important"
Chukin noted that his concerns about the tax system have increased.

"The state must show will, because macroeconomic stability, the sustainability of the tenge and the financial system are the basis of prosperity. If we do not put state finances in order, everything else will be unimportant. Not only will we not be able to raise pensions, salaries for public sector employees, build schools and hospitals, but we will also fail to fulfill the obligations we have already undertaken."

He emphasized that dissatisfaction with the VAT is understandable, but instead of populist slogans, a meaningful discussion is needed.

"The essence of the slogans is well known: 'Stop corruption – there’s enough money,' 'Ministers, go down and see what’s really going on,' 'Cut spending on officials,' 'Take more from raw materials producers and bankers,' 'Let’s spend the National Fund,' 'SMEs are a small part of the economy, leave them alone.'
All this needs to be done, but herbs and poultices do not solve trillion-dollar imbalances."

"The problem is not the VAT rate, but the fairness of taxes"

"VAT is a consumption tax, sensitive and regressive: low-income groups and the middle class feel it almost in full, and the upper groups spend their money on investment products, where VAT is less noticeable. But first of all, we need to solve the problem of fairness and equality. We have low rates of corporate income tax (CIT), individual income tax (IIT), and value-added tax (VAT), but high taxes on wages, plus actual duality: big business lives in the world of VAT, and the rest - in the simplified system," he said.

The expert believes that an attempt to "tweak" VAT without major changes will lead to even greater tax evasion.

"If the law-abiding ones are given a 4-6-8% VAT, and the ‘free spirits’ are left at 3-4%, the ‘scissors’ between the two economies will grow. Everyone will start to ‘optimize’ taxes even more actively. And it's not about the honesty of businessmen - the ‘white and fluffy’ ones will simply die out."

As an example, he cited two bakeries: one, using the simplified tax system, sells a bun for 206 tenge, the other, working with VAT, for 224 tenge.

"The question is: who will the buyer choose? And if the VAT is 20%?" he reasons.

"The problem cannot be solved with a populist attack"
In conclusion, Chukin stated that the tax system reform is long overdue.

"The issue is not 12, 16, or 20%, but the structure of the system itself. The tax burden in the cost price reaches 40%, and the industries are interconnected. The problem cannot be solved by a populist attack. But time is short - we will have to solve it quickly."

On February 7, at a meeting with representatives of business, the Head of State instructed the government to further study the issue of the VAT rate. In his opinion, it should be differentiated.