NATIONAL CHAMBER “ATAMEKEN”: INCREASING THE VAT RATE WILL LEAD TO INFLATION
The National Chamber of Entrepreneurs “Atameken” responded to information about an increase in the VAT rate from 12 to 16%. According to Timur Zharkenov, Deputy Chairman of the Board of the National Chamber and head of the working group for developing proposals for the draft of the new Tax Code from NCE Atameken, Atameken, together with the lion’s share of the business community, is categorically against increasing the VAT rate. This will lead to a sharp increase in prices for goods, inflation and the inability of small businesses to grow into medium-sized ones, and medium-sized ones into large ones.
“It is absolutely impossible to increase the VAT rate. Those who worked “white” will be forced to continue to work “white”. Those who worked in the black zone will remain there. Whoever was in the middle will go into the black zone. Thus, it will be possible to put an end to the president’s instructions regarding the expansion of small businesses into medium-sized ones,” said a representative of the NPP.
Let us remind you that as part of the development of the draft new Tax Code, the Ministry of National Economy proposes to raise the VAT rate from 12% to 16%.
The ministry believes that the proposed rate increase will lead to additional budget revenues and will also increase the competitiveness of domestic goods compared to goods imported from neighboring countries. This rate is expected to apply from 2025.
Meanwhile, the business community fundamentally disagrees with this position. Maxim Baryshev, entrepreneur, founder of Uchet.kz, has already expressed his opinion.
“It is unacceptable. This will not lead to growth, but will lead to stagnation of all entrepreneurship in the Republic of Kazakhstan. Moreover, the value added tax rates cannot be changed so quickly; 2025 is literally in a year,” Baryshev shared his opinion.
Today the VAT rate in Kazakhstan is 12%. This is significantly less than in Russia, Belarus, and Armenia, where the VAT rate is 20%.
It should be noted that a new draft Tax Code is planned to be submitted to parliament in the first quarter of 2024.