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Aigul Solovyova, "Changes in the Tax Code can kill small business in Kazakhstan!"

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This opinion was expressed at the public hearing at NCE by the Mazhilis MP, chairman of the Council on support of SMEs under the party "Nur Otan" Aigul Solovyova.

According to her, the initiatives proposed by the tax authorities should be based on incentives and motivations that enable business to develop. If the tax authority emphasizes that social components needs to be replenished, they should understand that it is based on balance. These measures, which, in fact, are not quite adequate in the current economic climate, tomorrow can lead to a drop in revenues.

The scheme of levying the sales tax at the rate of 5% on all sales of Kazakhstani goods, works and services, as well as imported products, can lead to the fact that the entrepreneurs will face a number of challenges during its introduction.

When charging sales tax on each sale and purchase transaction, there can appear "cascade" effect, which will be exacerbated by the presence of 4-6 intermediary links in the production and commercial chain. Since the sales tax will be included in the cost of goods (works, services) upon purchase, it will increase the cost of production. Such a conglomeration of the tax would create disadvantages for the final consumers of goods and services.

"You will never have the cascade effect – there will be constant fines, taxes will rise. But the social component of the budget won’t be executed to the extent that you have planned. Because business will also answer you for everything! "- said Aigul Solovyova.

In her opinion, the introduction of sales tax in the absence of any clarification on the possible transition from one tax to another, it will eventually lead to a radical change in taxation and it will cause nervous environment among business entities.

"It is important to understand why you are making these amendments? You want business to come out of the "shadow! But then you need completely different incentives! In my opinion, all you need to calculate and see and construct a model of taxation, in order to make it clear. And your assertion that these measures will help to deal with pseudo-entrepreneurship are not justified. For this there are regulatory authorities that have to deal with it", - says the MP.

In her view, ill-considered changes in tax law will only lead to losses to the budget, rising social tensions and, possibly an explosion.

"You will get such social pressure, which, in the end, will impact those, who adopted these parameters in the law. Ruining the business - it's not justified. Tomorrow, it may be that the state apparatus won’t have any money, as the "cash cow" will not bring any products that are necessary. So let's work", - said Aigul Solovyova, referring to the developers of the draft law.


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