New Tax Code: What changes await the entrepreneur
As it is known from the beginning of 2018 the new Tax Code comes into force
Galina Biryukova, head of the explanatory work department of the Department of State Revenues for the Pavlodar region, will tell you what innovations entrepreneurs are waiting for.
- Galina Vasilievna, the Chamber of Entrepreneurs repeatedly raised the issue of excessive complexity of tax legislation and the need for its revision taking into account the opinion of business. Atameken's voice was heard. What is the business community expecting from the introduction of this document?
- Yes, you are right. On 25th of December, the Head of State signed the Code of the Republic of Kazakhstan "On taxes and other mandatory payments to the budget" aimed at improving tax legislation in a new format. The Code provides for changing ideology, introducing incentives and simplifying administration. Ideology will now be aimed at protecting the interests of a bona fide taxpayer. Moreover, incentives will be given to various sectors of the economy.
- In other words, simply put, administration will become simpler, and will it motivate you to pay taxes yourself?
- Exactly. First of all, the Code is aimed at the development of small and medium-sized businesses. The introduction of a new special tax regime with the use of a fixed deduction. This mode is voluntary. The regime provides for higher criteria for marginal revenue and the maximum number for application in comparison with the simplified declaration, as well as reduction of taxable income by the size of the wage fund and the application of a fixed deduction of 30% of the average annual income, but not more than 70% of the average annual income.
At the same time, tax changes are envisaged in the agrarian sector, in geological exploration and subsoil use, industry and investment, the FEZ, the financial sector is expected to recover, and the burden on the payroll is reduced.
A single land tax for peasant and farming enterprises will be preserved. Since 2020, in connection with the general declaration, it is proposed to revise the object of taxation, depart from the estimated value of the land plot, setting a tax on turnover at a rate of 0.5%.
In order to solve this problem, in order to maintain the current load, it is proposed to reduce the social tax rate from 11% to 9.5% by reducing the contribution rate to the state social insurance fund.
Along with this, it is planned to cancel inefficient benefits and payments. For example, collection of auctions and fees for the use of navigable waterways are canceled, as the state does not provide services and permits in these cases.
The privileges for the release of turnover on the services of slot machines, the realization of lottery tickets, state postal payment signs, import of postage stamps are canceled. Also, privileges that contradict the requirements of the WTO are canceled, since according to WTO requirements, equal conditions for taxation should be applied for goods of domestic production and import.
The new Tax Code provides for reducing the limitation period for small and medium-sized businesses from 5 years to 3 years. The current threshold value for registration for VAT of 30,000 MCI is retained.
- Perhaps, it's not a secret for anyone that a lot of criticism from business comes up against tax inspections. How does the new Tax Code presume to solve this problem?
- In order to establish clear rules for interaction between state revenue bodies and the taxpayer, the principles of tax administration-the principle of legality, effectiveness of interaction, the principle of risk-based administration, are introduced. The rights and responsibilities for conducting tax audits have been clarified. The risk management system has been radically revised. Tax administration, including incentive and control measures, will be built on the basis of a differentiated approach to taxpayers.
With a low degree of risk - the absence of tax audits, possible easing in the form of changes in the timing of reporting, payment of arrears, the possibility of participation in horizontal monitoring.
In general, the tax policy is aimed at reducing the number of inspections and reducing the number of criteria for conducting inspections. As it was noted earlier, the ideology of administration is aimed at timely and complete fulfillment of tax and customs obligations by business entities.
In addition, I would like to note that an increase in the number of disclosed risk management system criteria is provided to stimulate taxpayers. Based on the best international experience, new procedures have been introduced - "Horizontal monitoring" and preliminary clarification regarding planned transactions with a guarantee of non-application of penalties when the position of the authorized body changes, taxpayers consisting of horizontal monitoring and organizations implementing an investment priority project will be able to apply.
Summarizing our conversation, we can say with confidence that the new Tax Code is developed from the position of business.