The national chamber of entrepreneurs of the Republic of Kazakhstan "Atameken"
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28 August 2018
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A discussion about the national system of marking and traceability of goods using means of identification was held on the site of the National Council.

The national system of marking and traceability, in fact, is an extension of the current pilot republican project for marking products made from natural fur.

November 27, 2017 the National Chamber together with SRC MF RK announced the launch of a pilot project for the marking of products made of natural fur in the territory of Kazakhstan. The project showed the effectiveness of the application of marking of goods in the fight against the shadow turnover. In Kazakhstan, 12,000 pieces of natural fur were imported annually, after the launch of the pilot project about 236 thousand fur items were marked. According to the SRC MF, the number of importers who issued a declaration for goods increased twice.

The purpose of introducing the marking is to improve public administration, healthy competition support, to protect the market from illegal products, to reduce the volume of the shadow economy and to increase tax revenues.

In addition, the marking will allow consumers to obtain detailed information about the purchased product and to insure themselves against counterfeit.

"Marking of goods is necessary for both the entrepreneur and the consumer. The main objectives of creating a system of marking and traceability of goods is to create equal conditions for business - preventing, restricting and suppressing unfair competition, confirming the authenticity of goods, suppressing the "gray" market turnover," - Deputy Head of the Administration of VAT Administration of SRC MF RK Yermek Syrgabaev said.

In November 2018, it is planned to launch a pilot project for the labeling of tobacco products for the domestic producer, but the issue of the timing of import marking is still open.

At the same time, the main problematic issue of state bodies for the introduction of marking is the absence of legislative acts and assigned powers for marking, which does not allow the approval of the list of goods subject to marking and traceability, as well as the dates of their introduction.

In addition, no work has been done to study the methods of marking (the RFID tag is used for the labeling of fur products, DataMatrix is planned for tobacco products), and the procedure for determining the value of brands is not defined. At the same time, according to Yermek Syrgabayev, the government is considering the issue of free or minimum cost of marking for socially important goods and inexpensive medicines. This initiative is supported by the National Chamber, but Atameken believes that free marking of socially important goods should not put a burden on the rest of the market participants and the state should assume a part of the costs.

A representative of the Ministry of Finance noted that the state offers business to act as a marking operator. This will allow the business community to choose a service provider. For this purpose, the register and rules of the operator organizations will be formed, where the Ministry of Finance will become coordinating body. The operator is the organization that will develop the system, accept the application and generate the codes. Along with this, it is planned to set up centers for labeling and marking.

"The product labeling centers will help entrepreneurs to mark goods. For example, when an importer imports a small consignment of goods through contacting the Goods Labeling Centers, the entrepreneur can reduce the possible time and financial costs," - Yermek Syrgabayev explained.

The business, in turn, was interested in whether products with a short shelf life, for example, eggs, would be labeled and how effective it would be.

"Just at the Ministry of Health of the Republic of Kazakhstan and the Ministry of Agriculture of Kazakhstan are analyzing the market in terms of determining the interest of business in the implementation of marking. According to the results, decisions on this issue will be made," - Yermek Syrgabayev said

The Executive Director of the Association of Direct Sales of Kazakhstan ALE, Anastassiya Kalashnikova emphasized that labeling bears great costs for business. So the purchase of equipment for marking can range from 1 to 10 million dollars for large manufacturers, this will lead to higher prices for products compared with products of the external market. In this connection, business is interested in the issue of subsidies for entrepreneurs within the framework of marking.

"We implement tools on the basis of which it will be possible to consider preferential loans, subsidies or leasing for large producers which will purchase expensive equipment," - Yermek Syrgabayev noted.

At the same time, the National Chamber notes that today business has certain doubts about the effectiveness of marking, as well as the fact that it is easier for large business, having the financial capacity to introduce marking, to adapt for it, in contrast to small and medium-sized business.

This fact can lead to the ousting of small and medium businesses from the market and to the monopolization of the market by large players. It is also worrying that the question of marking has not been worked out with retail trade, where a large number of small businesses are concentrated. Thus, the industry of direct sales, where about 20,000 individual entrepreneurs are currently employed, shares this apprehension.

Authorized bodies need to further elaborate the stages of introducing the markings in order to avoid the growth of significant financial costs of entrepreneurs and take into account the shortcomings faced by entrepreneurs in the implementation of the pilot project for marking products made of natural fur.

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