Prime Minister: 2026 proposed increase and lower registration threshold
The country’s Prime Minister, Olzhas Bektenov, has advocated for a higher 2026 VAT rate to offset the tax burden currently placed on wages and production costs. The current standard VAT rate is 12%. The government will finalise the new VAT rate no later than by mid-February.
The government hopes to implement the VAT reform by mid-2025 and formulate a budget for 2026.
The country’s Prime Minister confirmed the policy change this week at the first meeting of the renewed government. In a surprising development last year, Kazakhstan reversed its initial plan to increase the VAT rate by 4% in 2025 to 16%.
Bektenov said: “The main tax burden falls on the wage fund and, therefore, on the cost of goods. Even before the product hits the shelf, entrepreneurs are forced to pay most of the taxes. By increasing the VAT rate, we can reduce the burden on the wage fund,” Bektenov explained. If implemented, these reforms could generate an estimated 5-7 trillion tenge in additional budget revenue, providing a significant boost to Kazakhstan’s public finances.
Proposal to lower VAT registration threshold
Kazakhstan’s government has unveiled plans to significantly lower the VAT registration threshold for businesses, from 78 million tenge to 15 million tenge. Deputy Prime Minister and Minister of National Economy Serik Zhumangarin announced the proposal during an expanded government session, emphasizing the need to expand the VAT base and improve revenue collection efficiency.
Initial approval and calls for further discussion
President Kassym-Jomart Tokayev has expressed support for the proposed VAT reforms but emphasized the importance of engaging in further discussions to ensure comprehensive understanding and alignment. His stance underscores the government’s commitment to balancing fiscal goals with the concerns of businesses and citizens.
The road ahead
While the government’s VAT reform proposals hold potential to strengthen Kazakhstan’s budget, they have sparked discussions about their impact on businesses and the broader economy. With a push for a lowered VAT registration threshold and debates over raising the VAT rate, Kazakhstan’s evolving tax policy remains a focal point for economic planning in 2025.
Stakeholders now await further clarification and deliberation as the government navigates these critical reforms.
