The Ministry of National Economy has developed an advisory document for the project of the new Tax Code reform, aiming to address various issues in the tax system. The document proposes transitioning to differentiated tax rates across different economic sectors, accelerating the implementation of progressive taxation, reforming special tax regimes, and streamlining tax exemptions by at least 20%.
Furthermore, the document suggests transitioning to a service-oriented model of interaction between state revenue bodies and taxpayers, updating tax administration, fully digitizing tax control with a 30% reduction in tax reporting forms, and introducing mechanisms to reduce or exempt corporate income tax for investments in technological modernization and scientific research.
The reform also aims to reduce the total number of tax and mandatory payments by at least 20%, exempting foreign and domestic investors from taxes and other mandatory payments for the first three years of implementing new projects in the processing industry, and simplifying the VAT refund procedure.
To address existing tax issues, the document proposes a differentiated approach to VAT, with the right to offset additional amounts to certain entities, differentiation of CIT rates (25% for banks, 20% general rate, 10% for agriculture, financial leasing, and social sphere), and fair distribution of the tax burden based on profitability.
Moreover, measures to stimulate reinvestment of profits into business development include mechanisms to reduce or exempt CIT for profits directed towards technological modernization and scientific research, granting taxpayers the right to allocate expenses for repairs and setting a unified depreciation rate.
Additionally, the proposal includes adjustments to the unified land tax to promote efficient use of agricultural land, along with increased taxation on luxury items. These changes are aimed at achieving social and economic balance, boosting budget revenues, and regulating the consumption of certain goods.
The document also emphasizes the harmonization of excise rates on tobacco products and the full digitalization of tax control through enhanced information sources and remote administration measures. It envisions consolidating taxpayer information from various sources, including foreign entities, and expanding the use of preventive control methods.
Furthermore, the plan entails a 30% reduction in financial tax reporting by eliminating duplicate attachments and exempting small businesses without employees from tax reporting obligations. The new Tax Code is expected to be adopted in October 2024, with the advisory document open for public discussion until March 27 on the Open Regulatory Acts website.
Previously, a law was passed by the parliament to reduce the administrative burden on businesses, paving the way for comprehensive tax reforms in Kazakhstan.
