The new tax reform being prepared in Kazakhstan is already causing discontent among ordinary citizens, excluding officials.
The publication Caravan.kz details what exactly citizens are complaining about and how changes in tax legislation are already affecting the economy. It is worth noting that this is one of the most discussed projects on the "Open PNA" platform. Among the comments, it is very difficult to find those who support the proposed changes.
There is another important aspect.
Price Increase
The main concern of the population, including those who do not run a business, is the expected rise in prices for all goods and services.
The reason lies not only in the increase of the tax rate from 12% to 16%, but also in the lowering of the VAT threshold, as well as the cancellation of the simplified taxation system for most types of activities. As a result, many companies will be required to pay VAT and hire accountants to maintain the necessary documentation, which will ultimately affect consumers.
"Note that VAT is charged at all stages - from production to sale. This can increase costs by 15-20%. For example, a basket of groceries that cost 20,000 tenge will cost about 25,000 tenge. This is not trivial. The service sector and transport will also feel the impact of rising prices, which will contribute to inflation."
"How can this not concern you if you are not a businessman? Everything you buy, you buy from VAT payers. Even a simple chocolate bar that I buy will cost more, and I will have to pay more. Prices will rise for everything."
Price increases are already noticeable, and even children are aware of this.
Some citizens note that prices in Kazakhstan have already equaled those in Europe, including Shanghai, which is considered one of the most expensive cities in China.
Challenges with OKED
The initial list of OKED for which the simplified taxation system will not be available includes hundreds of items, including socially important areas such as medical and educational services. After adjustments, this list still remains extensive.
The choice of OKED was explained by the fact that they are oriented towards large businesses and the B2B sector. While this may be justified for sectors such as the space industry or manufacturing, many other included activities raise questions.
"Our correction center ended up on the list of organizations without a simplified system. What are we supposed to do now? Salaries are not increasing, but prices are rising. People are already complaining about the increase in food prices and demanding higher wages."
"Our clients are parents of children with special needs who come to us not from a good life. If prices rise due to taxes, how will they be able to help their children?"
"Including wheelchair manufacturers for people with disabilities on the list is just awful. Caring for people with illnesses will now become a tax burden."
"It is unclear how the law exempting the mining sector from VAT burdens me as a teacher who has to pay VAT from my small business."
Business Closures
Many entrepreneurs are convinced that their low margins will not allow them to survive in the new conditions. This will lead to the closure of hundreds, if not thousands, of small and medium-sized companies.
As a result, there will be an increase in the unemployment rate and growth in social payments. At the same time, tax revenues to the budget will decrease as closed companies will stop paying taxes.
Note from "Karavan": similar changes to the tax code were proposed 30 years ago, in April 1995. As a result, from April 1, 1995, to September 1, 1996, nearly a million individual entrepreneurs and partnerships closed in Kazakhstan.
There may also be an increase in the number of labor migrants: trips to strawberry fields in Europe are becoming increasingly popular, which could lead to a real boom. Young Kazakhs, unable to find decent work at home, will be forced to seek their fortune abroad.
"Hundreds of thousands will be left without work. If now people choose between low-paying jobs and waiting for higher-paying ones, in the future they will fight for any opportunity. I am currently in Egypt and see men aged 30-40 washing dishes and sweeping floors, happy to have a job. The whole country will be working in Russia and Korea, where we will have to compete with migrants from Kyrgyzstan and Uzbekistan for the right to deliver pizza or take someone home."
Many are considering relocating their business abroad. Some have already received relocation offers from foreign companies, especially in the garment industry.
"Entrepreneurs will start relocating their enterprises to other countries, such as Kyrgyzstan or Uzbekistan. The movement has already begun."
The overall atmosphere in the private sector does not inspire optimism.
