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Tengrinews.kz - Deputy Prime Minister and Minister of National Economy Serik Zhumangarin has explained the decision to lower the VAT registration threshold.
According to Zhumangarin, currently, only 4 percent of businesses pay VAT.
"Many companies deliberately split their businesses to avoid taxation. This undermines the tax system and disrupts proper VAT offsetting. Therefore, it is proposed to lower the VAT registration threshold from 80 million tenge to 15 million tenge," Zhumangarin said at a government meeting.
He added that conditions are being created where the costs of business fragmentation will outweigh its benefits.
"This will establish equal conditions for businesses and prevent tax evasion schemes. We are following international practices in this matter. In most developed and developing economies, the VAT threshold is either significantly lower or does not exist at all. For example, in Canada, South Korea, Scandinavian countries, several Eastern European nations, and our neighboring countries—Russia, Uzbekistan, and Kyrgyzstan—the thresholds are lower than in Kazakhstan," noted Serik Zhumangarin.
Read also: The VAT rate proposed by the government is too high - Tokayev
