The National Chamber of Entrepreneurs held a public hearing on the issue of unjustified tightening of fiscal policy

The business community of the Republic of Kazakhstan is seriously concerned by the new tax policy and tax administration, conducted by the competent authorities, which is essential in the present economic situation, as it puts domestic business at a disadvantage if compared with businesses in the other Member States of EAEU, thus, reducing the potential of  Kazakh businessmen in terms of becoming more competitive in domestic and foreign markets.

In recent years, thanks to the policy adopted by the Head of State and implemented drastic measures to support domestic businesses, including changes in the system of state control and supervision, simplification of the licensing  system, a change in legislation to support investment initiatives, financial and non-financial measures within the framework of government programs for support of business.

For us it was important – so that the planned and adopted programs began to be implemented effectively, and the operating system of business administration did not change in the direction of tightening.

However, the steps were taken today by the authorized bodies and supported by the Government, in our common belief, they do not allow to realize the strategic development of small and medium business in the country.

And one of these steps is the policy of introducing new taxes and stricter tax and customs administration.

Business does not understand how it is possible without serious calculations and analysis of possible economic and social consequences, to take such risky and potentially negative solutions for the economy - to introduce the sales tax at the rate of 5% (corresponding to about 20-25% of  VAT) as well as the retail tax with a rate of 5 to 12%, reducing 10 times the threshold for registration as VAT taxpayers (and thus extend the tax on all businesses, including the micro businesses), to increase more than 40 times the size of mineral extraction tax  for the extraction of groundwater, as well as to introduce a system of compulsory health insurance (with compulsory deductions of  2% and an annual increase of up to 5%) and compulsory pension contributions of employers (5% of the payroll), unnecessarily increasing the financial burden for businesses?

How was it possible in a sharp contraction of product markets, the need to compete with the rise in price of imported raw materials and equipment for the production of domestic products, introduce stricter tax and customs administration?

It is evident that the introduction of these measures will increase by several times the tax burden on businesses, decrease the competitiveness of business, reduce the investment attractiveness of Kazakhstan's economy, there is a risk of inflation and the shadow economy, the reduction of the tax base.

It is suffice to note that the calculations showed - only for small businesses that make up more than 90% of the total business in Kazakhstan, with a decrease in the threshold for the registration as VAT payers, the tax burden will increase by almost 2-fold, for more than 500,000 small businesses with the introduction of  5% sales tax will increase the load on business by average 3 times. Taken together, the introduction of all measures related to the optimization of tax regimes, the introduction of sales tax and retail tax, it will cost small businesses a 7-fold increase in the tax burden.

The decision to introduce accompanying invoices for imported goods will add significantly to the increase of non-operating expenses for businesses. And the establishment of the responsibility for the failure or violation of the terms of the submission of preliminary information will lead to the fact that carriers will be brought to accountability unreasonably, the number of administrative barriers at the border will increase, as well as the rise in the cost of shipping.

During the year, there was an active discussion of the new provisions related to tax policy and tax and customs administration, there were developed consolidated business proposals. However, most of these proposals, bearing a conceptual nature, have been ignored by state authorities.

Unfortunately, today most of the proposed measures, which the business community cannot accept, are pending in the Parliament. Another initiatives will be discussed in the highest legislative body of the country.

 So, by the beginning of next year we will start to "harvest the fruits" of such hasty decisions.

It is possible that in this situation in the short term, many enterprises will curtail their activities or return to "gray schemes".

Dear deputies!

We, the heads of enterprises, business associations on behalf of the business community ask the deputies to pay attention to our concerns about the tightening of fiscal policy and administration, and the adopted laws should take into account the opinion of the business community of the country for which they are written, as all these laws are in the interest of  both businesses and the whole Kazakhstani society.