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Gani Kasymov: "For three years, we have defended the rights of entrepreneurs in the amount of 41.7 billion tenge"

28 December 2016
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The growth of appeals from business - it is an indicator of trust to NCE, believes the head of the Council for Protection of Entrepreneurs

The Council for the Protection of the Rights of Entrepreneurs under NCE RK "Atameken" has been operating for three years. During this time, an advisory body created its own network of branches in the republic, where every businessman can go for help. The Chairman of the Council Gani Kasymov spoke about the most topical issues of Kazakhstan's business and results of the work on protection of the rights of entrepreneurs.

Currently, more than 110 lawyers of the highest qualification are engaged in legal protection of Kazakhstani business community within the central Council on protection of the rights of entrepreneurs and its regional subsidiaries.

The Council consists of very reputable people - two deputies of the Mazhilis and the Senate, the Deputy Attorney General, representatives of the Agency for Civil Service Affairs and Anti-Corruption and other state bodies, as well as public figures.

For three years we have conducted 333 sessions, including 299 in the regional centers. In 2016 were held 108 meetings of the Council: 100 in RCE and 8 at the central office, including five off site meeting. I should note that off-site meetings of the Central Council on the protection of rights of entrepreneurs are held regularly in the country.

In total, the system of NCE RK has received more than 15 thousand applications within line of business defense. Of these, from 2013 to 2015 - 10 thousand applications (2 604 in head office of NCE RK and 7407 – to RCE), and this year alone more than 5000 (1466 in the head office of RK, 3953 – to RCE).

The growth of appeals, on the one hand, is the indicator of trust to the national Chamber as a new institution, which represents the interests of business and, on the other hand, the impressive figures that clearly demonstrate how much violations still occur! And that depresses me most is the fact the number of appeals, unfortunately, is not reduced.

- Ghani Esengeldinovich, with what questions and problems entrepreneurs often address to the Council?

- Most complaints are related to taxation. As you know, the Government has decided to revise the Tax Code in 2017. The new document will be formed taking into account the views of the business community, which will accumulate the National Chamber of Entrepreneurs "Atameken". It is almost a revolutionary step. For the first time the business community will participate in the creation of this document.

In 2016 issues related to taxation amounted to 14% of appeals. In second place – the complaints related to procurement (13%), the third - land issues (12%).

I would like note that in our country the paperwork for permission to start construction costs more than the construction itself. According to specialists, the small objected can be built in 60-70 days, and paperwork takes - 120-140 days.

In the fourth place are complaints on civil disputes between entrepreneurs, including foreign entities and individuals, 10%, in the field of architecture, 6 %, in construction, housing and communal services, 6% - legal support of business, 5% - agriculture.

During the overall work of the Council the largest number of complaints were received on tax issues - 13%, on land issues - 13%, on procurement - 10%, on disputes between entrepreneurs - 7%, on architecture, construction, housing and communal services - 7%, on legal support - 6%, on agriculture - 3%.

- How to solve the issues with entrepreneurs, who come to you?

- Today, thanks to the common efforts about 50% of business complaints are solved positively in their favor.

By the results of the work of the lawyers of the National Chamber for three years, there were protected property rights of entrepreneurs worth over 41.7 billion tenge: 8.4 billion tenge in 2014, 14.4 billion tenge in 2015 and 18.9 billion tenge in 2016.

It canceled fines, penalties, the money returned by state authorities, and the cost of business assets. It is the contribution of the National Chamber and the Council for the protection of the rights of entrepreneurs.

The result – it is a very good moral charge for all of our lawyers. I want to express my gratitude to all of them.

I would also like to thank the Prosecutor General's Office and Deputy Prosecutor General Andrei Kravchenko, who is a member of our Council for the understanding on the part of the supervisory authority at all levels. During the three years, at the request of the National Chamber 16 supervisory / cassation protests were ruled out, most of which have been satisfied.

I would like to note the close cooperation with the Agency for Civil Service Affairs and Anti-Corruption, and work with the Internal Revenue Service. All problematic issues of business in tax field, we will consolidate and give to the tax office. I think that today there is a need to soften some of the articles of the Tax Code, and some articles of the repressive nature may have to be removed completely.

- Ghani Esengeldinovich, could you give us an example of appeals that the Council was able to solve positively for the business?

- Sure. I will give you a few examples that are systemic in nature, and are taking place in every region of Kazakhstan.

At one of our meetings we reviewed the appeal of LLP "TOP LTD". The partnership could not receive payment for construction works under a contract of public procurement for a long time. Construction department of Kokshetau owes to the business entity more than 130 million tenge.

The problem was discussed at the offsite meeting of the Council in the town of Kokshetau. Based on available information, this debt has been repaid fully.

However, this story did not end up there. Under other obligations the local executive bodies must pay to the company more than 270 million tenge. The Chamber has defended the interests of a business entity, and we have already received an email confirmation that the amount is laid down in the regional budget. We will keep this issue under control, until the full repayment of the debt to the LLP.

As for appeal of a sole trader Tulendieva, I myself traveled to Almaty and considered the question. The fact is that Gulnar Tulendieva was engaged in the organization of the shop on her land plot in Almaty for a long time, but could not get the architectural and planning documentation from local executive bodies. They allowed her to demolish old buildings at her own expense, but she wasn’t allow to start the construction, as the land plot is located in the red line zone. Then Tulendieva went to court. The court ordered the Department of Architecture to issue architecture and design documentation. However, the court decision was not executed within a year and a half.

We were involving the media to solve this issue. As a result, architecture and planning documentation was quite formal and in fact it didn’t allow the launch of construction. Then the Akimat of Almaty offered to the entrepreneur an alternative.

Hundreds of entrepreneurs, who can’t approve the architectural design task, are in that position.

Another example - this is LLP "Iasi Group". In 2014, the company appealed to NCE due to illegal charges by the tax authorities in accordance with the law on transfer pricing. The total amount of tax assessments amounted to more than 194 million tenge.

Of course, the association appealed the requirement of the tax bodies in the court. Legal proceedings went on with varying success, the case reached the Supreme Court, on 10th of March, this issue was dealt with by the Council. The National Chamber appealed to the Prosecutor General's office for support of the business entity.

On 18th of May, the Supreme Court put an end to this issue, adopting the decision in favor of LLP "Iasi-Group". Bearing in mind that similar problems may occur in the future, and the Supreme Court forms jurisprudence, we hope that this decision will be a positive precedent for the cotton business in the future.

And here I want to emphasize that the Chamber and the Council review cases and support only honest entrepreneurs.

Another example in the field of taxation and land relations - it is the case in the town of Shakhtinsk of Karaganda region.

Land Relations Department of Shakhtinsk used the base rate of land tax in the amount of 8 tenge per 1 sq. meter for all settlements, which are subordinated to the town of Shakhtinsk, including villages.

In this regard, a high rate of land tax of Shakhtinsk was applied to the subjects of private entrepreneurship in these villages, although the rate of less than 1 KZT should be applied to these settlements. And a license fee for the sale of alcohol products was paid like from a village - below 100 MCI (more than 200 thousand tenge.).

On 9th of August Prosecutor’s Office of the Karaganda region made representation to the head of the State Revenue Department to eliminate violations of the law. In response SRD reported that the license fee paid in excess of the norm by entrepreneurs of these settlements will be offset in subsequent periods.

The most important thing - the people were convinced that the Council has leverage over those who exceed their authority in such matters in the regions.

- And what question is still not resolved today?

- One of the outstanding issues is the problem of LLP "Souths-Oil". In 2014, the prosecutor's office of Kyzylorda region opened a criminal case against management of LLP "Souths-Oil" on the fact of tax evasion.

During the investigation, the State Revenue authorities revealed the fact of non-payment of more than 890 million tenge to the budget, the penalty in the amount of 207 million tenge was accrued on top of it.

Business entity appealed the results of the inspection, and therefore the investigations were interrupted. The prosecutor's office of Kyzylorda examined the case file, found violations in the actions of the investigative body and gave instructions again to resume the investigation with the study of the arguments of the entrepreneur.

The problem of LLP "Souths-Oil" was considered at the meeting of the Council in March 2016. The issue is under consideration by the State Revenue Committee of MF RK, a final answer on it is still pending.

We are working to ensure that a fair decision is made.

- Ghani Esengeldinovich, one of the topical issues – is pseudo-entrepreneurship. What do you think about it?

- We have proposed repeatedly to exclude the article "pseudo-erprenership" from the Criminal Code, as honest businessmen suffer - contractors of the company, which is recognized as a pseudo-enterprise.

What is pseudo-entrepreneurship? This is when the company entered into a one-day contract with another company, and then disappeared. As a result bona fide companies suffer from it. We believe that it is biased, and we offer to delete this article.

We have ensured that the Prosecutor General's Office supported us and have made 4 cassation protests.

The loudest case on pseudo-entrepreneurship can be called the case of Minakov, bona fide contractors of which received tax notices for the payment of more than 14.5 billion tenge. Although these companies have already performed the obligations to the budget on their part. Can you imagine the condition of a person?

We intervened, and today we can say that they are exempt from this colossal sum.

At the end of our conversation again, I stress that every question, which was considered by the Council, is under control, up to its final decision, it may be a positive or neutral.

Yes, we understand that all questions can’t be solved immediately, so we are always looking for. For 3 years we made from our lawyers universal lawyers of an entirely different level.

I believe that today we have not only to revise the tax code, but to minimize the rights of those who often exceed their authority and go beyond the law. Today there is a situation when 65 organizations have the right to suspend the activities of an entrepreneur. And what can be said? People are not given a chance to work. The National Chamber of Entrepreneurs opposes it.


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