Kazakhstan needs to raise VAT rate - Prime Minister Bektenov

Tengrinews.kz - Kazakhstan needs to raise the value-added tax (VAT) rate. This was announced by Prime Minister Olzhas Bektenov at an extended government meeting.
As the Prime Minister reported, in Kazakhstan, despite some positive results, the dynamics of economic growth are insufficient. Kazakhstan's industrial potential is much larger.

"We have an insufficient development budget. In developed countries, it reaches 25% of all government expenditure, while in our country it is 8%. Of the nearly 26 trillion tenge of the republican budget, only 2 trillion are spent on development. The rest is the current budget, a significant part of which is social spending. The areas that are the basis for economic development remain underfunded: electricity, heat and power engineering, water management, gas transportation system, roads, utility networks and infrastructure. Development institutions are not provided with sufficient liquidity. In such conditions, it is quite difficult to reliably ensure high growth dynamics," said Olzhas Bektenov.

According to him, the country needs to implement a set of measures to improve the tax and budget system. The current tax system not only does not provide the state with the volume of investments, but is also unfair to entrepreneurs. The main tax burden falls on the wage fund, and therefore on the cost price.

"Even before the product hits the shelf, the entrepreneur is forced to pay most of the taxes. The government proposes to reduce the burden on the wage fund by transferring it to sales. To do this, it is necessary to increase the VAT rate, while simultaneously reducing the social tax and mandatory pension payments by the employer. This will increase the competitiveness of enterprises and create the necessary financial reserve for them," the prime minister said.

As a reminder, an extended government meeting with the participation of the President is taking place in Astana. Today's meeting will summarize the country's socio-economic development for 2024, and identify key tasks for the coming period. Prime Minister Olzhas Bektenov, Chairman of the National Bank Timur Suleimenov, as well as akims of a number of regions will deliver reports.
Officials gather for extended government meeting with Tokayev