Deputy Chairman of the Board of "Atameken" believes that it is necessary to create a profitable and safe system of taxation in Kazakhstan

The Discussion Club "Atameken" under the National Chamber of Entrepreneurs of Kazakhstan "Atameken" held a meeting on the subject "Overview of tax reform". The discussion was attended by Executive Director of the Forum of Entrepreneurs of Kazakhstan Munavara Paltasheva, Chairman of the Board of JSC "Economic Research Institute" Sergan Madiev, director of the company Oil Gas Project Zharas Akhmetov, Deputy Chairman of NCE Rustam Zhursunov etc. The moderator of the event was Rakhim Oshakbayev - Chairman of the Advisory Board of the Centre of applied research "Talap".

On 29^th of August 2016 the Government adopted the forecast of socio-economic development of the Republic of Kazakhstan for 2017-2021. The forecast states that within the tax policy will be continued work on improvement of the economic impact of the tax system, including the elimination of disproportions and increase of the tax base. This leaves open the question of the timing of the inherent initiatives, including the economic feasibility of lowering the threshold for registration a VAT payer and reduce the competitiveness of SMEs by canceling STR.

Speaking at a meeting of the discussion club, Rustam Zhursunov expressed the opinion that Kazakhstan should introduce a system of taxation, in which the tax payments will be beneficial and safe. "As for the potential. The potential we see in the first place, in the removal of our entrepreneurs from the shadow. According to World Bank estimates, 38% are in the shadow. According to the estimate of the business climate, of all taxpayers 18% do not show the turnover to the tax authorities. We need to make payment of taxes profitable and safe", - he said.

According to him, one of the highlights is the issue of pseudo-entrepreneurship. "By the way, I'm afraid to please in advance, but now we came to an agreement with Daulet Edilovich (Chairman of the State Revenue Committee Ergozhin) to eliminate article 215 on "pseudo-enterprises". Instead, we adopt the Russian model, but then it will be article 245 "tax evasion" and a lot more cases of initiating proceedings. I would like to mention it immediately", - said Zhursunov.

The deputy head of NCE noted that they consider the possibility of an appropriate amnesty. "But the entrepreneurs will not be involved in the prosecution. Moreover, we are really working on some kind of amnesty question if you have worked with pseudo-enterprise. This question is conceptually worked on. I think that by October we will present the results of our work", - he said.

At the same time, he believes, there are opportunities to increase taxes and fees. In particular, we are talking about patents. "We say that we have a serious tax load. What about patents? Do you know that almost everyone 82%, who has a patent, show a turnover of up to 2 million tenge. - It is 167 thousand tenge per month or 5,5 thousand tenge per day..? Where have you seen the store with a turnover of 5 thousand tenge per day in Almaty, Astana or a village? So there are questions, and our colleagues from the tax committee raise tricky questions", - said Rustam Zhursunov.

According to him, it is necessary to create conditions for competitiveness in every industry. "We understand as the curators of the tax unit that, if we want to create a competitive Kazakhstan, then we should have a competitive economy. In order for us to have a competitive economy, we must have competitive industries", - he said.

At the same time, there is no statistics on the actual ratio of the tax burden in Kazakhstan. "If we talk about the competitive industries, we need to have a competitive factor of the tax burden. No one knows now is real tax burden ratio, as there is no statistics", - he said.

"There is a generalized statistics, on the basis of turnover. If you say that the ratio of the tax burden in banks is 3.5%, would you believe? For turnover - yes, but to the profits - I do not know. And if they say that the ration of the tax burden to trade is 3.3%, will you believe it? This figure says nothing to me", - he added.

Zhursunov said that, for instance, the oil business decides to work in a particular country in comparison with other countries, where there is oil. "If we want a competitive oil industry, then, sorry, the oil companies have the option to go to Algeria, Nigeria, not to Kazakhstan. There is no difference. Therefore, we need to get a ratio of the tax burden, which, firstly, gives them a guaranteed return on investment, and secondly, provide additional opportunities for investment of their cash flow in capital funds", - he said.

In turn, chairman of the Board of Trustees of the Center for Applied Research "Talap" Rakhim Oshakbayev noted that according to the World Bank and of PricewaterhouseCoopers, Kazakhstan is a country with a liberal tax system. "We can see that Kazakhstan is objectively not only a regional leader, but also in the world, ranking 18th out of 189 countries - virtually included in the top 10% by how easy it is to pay and fulfill the requirements of the tax legislation. Total tax rates are about 30%, 20.2%, which is below the world average, lower than in China, Russia, Ukraine and so on. We have a total of 7 payments and it requires just 188 hours per year for the average company to fulfill the requirements of the tax legislation", - he said.

However, he said, while accounting taxes and fees take, we shall take into account all the mandatory payments. "However, if you simply take the existing legal framework, we have counted in Kazakhstan, at least 36 different types of taxes and other obligatory payments, including 7 types of extra-budgetary contributions. We have 13 kinds of taxes, 3 kinds of compulsory payments, which include in addition to state fees 6 kinds of fees, 9 payments, and currently appeared a mandatory contribution in compliance with the law. Business entities should perform them. They do not appear in the Tax Code, but nevertheless, in essence they have quasi tax nature", - said Oshakbayev.

Rakhim Oshakbayev also expressed serious concern that in recent years the number of extra payments seriously increased.

According to him, the amount of tax legislation has increased, and this load will increase again in the coming years. In this regard, Oshakbayev proposed to create conditions to stimulate income of population. "In terms of the economic challenges that we have: low employment rate, falling income. Of course, we need to stimulate income of population. It seems to me, the easiest way, at least, not increase, but to simplify and to reduce the load on the wage fund, to encourage employers to pay and not to fix wages, but to raise them", - he said.