Legalization policy in Kazakhstan brings to light seven new millionaires

Thanks to the policy of property legalization launched in Kazakhstan on September 1, 2014 seven new dollar millionaires have already been identified. All of them are residents of Almaty and Astana, Tengrinews reports citing KTK TV channel.

Second-tier banks have opened several accounts for these newly minted millionaires. The sum they returned is quite impressive - billion an a half tenge or $8.25 million.

Legalization is to last until the end of next year and the government expects it to be the most lucrative in the history of the country. They estimate that about $12 billion will be returned to Kazakhstan. Since the beginning of the policy, a special commission has already received more than 2,500 applications.

Those willing to legalize property file an application for property legalization to the tax authorities dealing with the appropriate type of property other than money. A special commission in the designated authority has up to 30 days to review the application. A fee of 10 percent [of the cost of the property] is withheld to legalize property located outside Kazakhstan.

Legalization of money is conducted through commercial banks or the national mail operator KazPost, by means of opening special savings accounts.

In Almaty, approximately 700 people have brought to light the capital amounting to 10 billion tenge ($55 million). More often than not real estate is involved.

Official data suggests that more than a quarter of the Kazakh economy is in the “shadow”. Legalization is capable of significantly changing the situation, the Ministry of Finance believes.

"The share of the shadow economy in 2013 constituted 28.6 percent of Kazakhstan’s GDP. Kazakhstan's GDP is 35 trillion tenge [$192.46 billion]. That is, clearly, a very significant proportion," the Chairman of the Tax Committee of the Ministry of Finance of Kazakhstan Anuar Dzhumadildayev said.

This is the third legalization in the history of independent Kazakhstan. The first wave of capital amnesty took place 13 years ago and brought $480 million to the treasury.

The second legalization in 2006 was much more fruitful: $7 billion was returned into the economy.

Now, the authorities are hoping to return a staggering $12 billion. Money, securities, stakes, real estate can be legalized as part of the campaign.

However, some experts are not quite so optimistic. "It is far from certain that the entire amount of $12-13 billion will be returned. And most importantly, even the amount that will be return, be it legalized capital or property, no one gives it a full guarantee, no one gives a full guarantee of protection," political analyst Dosym Satpayev said.

By Dinara Urazova