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New Tax Code: new changes for the entrepreneurs

01 January 2018 - Pavlodar Region
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As it is known, New Tax Code takes effect from the beginning of 2018​

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 brought up an issue about     an excessive complexity of Tax Code and its reconsideration necessity with due regard for business.  The voice of “Atameken” was heard. What can we expect with the implementation of this document?

- Yes, you are right. 25 December, the Head of State signed The Code on Taxes and Other Mandatory Budget Payments, aimed at the improvement of the Tax Code in a new format. The Code provides for ideology change, promotion and administration simplification implementation. The ideology will be focused on the protection of good faith taxpayer interests. Besides, different economic sectors will get its stimuli. 

- So, does it mean administration will be simplified and will motivate for self-payment of taxes?

- Yes and first of all the Code is aimed at the development of a small and medium-size business. The Code also provides for the establishment of a new tax regime with fixed deduction. This regime is non-mandatory. The regime provides for higher criteria of marginal revenue and maximum number in a comparison to simplified declaration, and it also provides for the taxable income reduction at the size of wage fund and the implementation of fixed deduction at the rate of 30 % from annual average, but no more than 70 % from the annual average.

At the same time, there will be changes for the agricultural sector, geological exploration, subsurface resources management, industry and investment sector, e-procurement system. It is expected the improvement of financial sector and wage fund pressure reduction. Single tax for farmers will be saved..

In 2020, in general certification is offered to reconsider taxable income, to step away from land estimated value, having established taxation at the rate of 0.5 % from the trafficking.

To reach this goal and to maintain current workload is offered the social tax reduction from 11% to 9, 5% by lowering assessment rate contributions to the State social Insurance Fund.  It is also planned to cancel inefficient benefits and payments.

For instance, the auction charges and user fees for navigable waterways are cancelled as the state does not provide services and permissions in these present cases.

Are cancelled the benefits for amusement machine tax turnover, lottery tickets realization, the realization of postage state emblem and postage stamps import. Are also cancelled all the benefits contradicting to WTO requirements, because as for the WTO requirements there must be equal tax terms for the domestic production and import goods.

The reduction of limitation period for small and medium-size business from 5 to 3 years is considered in the new Tax Code. The current threshold for the registration of value-added tax 30000 monthly notional units is remained.

- Well, there is no secret that there are a lot of blames towards tax inspections. How can the new Code solve this problem?

-To establish clear cooperation rules between Internal revenue bodies and taxpayers are implemented the principles of tax administration – the principle of legality, effective collaboration, the principle of risk orientated administration. Are clarified the rights and obligations for tax inspections. Is absolutely reconsidered risk management system.  Tax administration, including stimulating and supervisory measures, will be built upon the 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.

Summing up, we can surely say that the new Tax Code is developed through a business prism.

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