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President Kassym-Jomart Tokayev has officially signed the new Tax Code of the Republic of Kazakhstan, along with the accompanying law on amendments to tax-related legislation, marking the most comprehensive overhaul of the country’s tax system in over a decade.
The reforms, which aim to streamline tax administration and enhance economic efficiency, were announced by the Akorda presidential press service and represent a major step forward in Kazakhstan’s fiscal modernization agenda.
Key Changes: Simpler Tax System, Fewer Taxes, Clearer Rules
The revised Tax Code introduces a 30% reduction in the volume of tax reporting, while also decreasing the number of taxes by 20%. The government has also revised the framework for tax incentives, fees, and levies, seeking to balance investor attractiveness with fiscal sustainability.
Significant amendments have been made across nearly all major tax areas, including corporate income tax (CIT), individual income tax (IIT), VAT, and investment-related provisions.
VAT Adjustments: Base Rate Raised, Sectoral Differentiation Introduced
One of the most impactful changes is the revision of the value-added tax (VAT) structure:
- The general VAT rate is now set at 16%, replacing the previous 12% rate.
- Pharmaceuticals and medical services will be subject to 5% VAT from 2026, increasing to 10% in 2027.
- A 10% VAT applies to the sale of periodical print publications.
- The threshold for mandatory VAT registration has been lowered to 10,000 MCI, equivalent to approximately 40 million tenge.
The revised VAT policy is designed to increase budget revenues while maintaining a degree of relief for socially significant sectors.
Prime Minister Olzhas Bektenov previously justified the VAT rate hike as necessary to support fiscal stability amid evolving macroeconomic conditions and increased public expenditure demands.
Broader Tax Objectives: Redistribution and Investment Promotion
Beyond VAT, the new code also focuses on:
- Redistribution of the tax burden to improve fairness and reduce informal practices;
- Enhanced investment incentives, particularly in priority sectors;
- Clearer and more predictable tax norms to improve legal certainty for taxpayers and investors alike.
The government has emphasized that these reforms align with Kazakhstan’s strategic goal of becoming a regional financial and business hub.
Implementation Timeline
The majority of provisions under the new Tax Code will take effect on January 1, 2026, allowing time for businesses and tax professionals to adjust. However, some changes, including registration thresholds and certain administrative procedures, will be phased in gradually starting in late 2025.
Further guidance is expected from the State Revenue Committee in the coming months regarding implementation and transitional rules.
Outlook
Tax experts and business leaders are closely analyzing the final version of the law to assess its implications. While the higher VAT rate presents new challenges, the simplified administrative regime and rationalized tax structure are expected to enhance compliance and reduce costs in the long term.
The reform marks a pivotal moment in Kazakhstan’s tax policy evolution, balancing revenue generation with business facilitation.
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