A joint meeting of the Committees of the Presidium for SME development and trade was held at NCE with the participation of committees of agriculture and food industry, which include more than forty national industry associations

The event was held in a format of a videoconference, involving all regions of the country. The issues of taxation of SMEs and the agricultural sector and new approaches to the regulation of prices for socially important food products were considered during the session.

The meeting was opened by deputy chairman of NCE "Atameken" Nurzhan Altaev. He commented on the Address of the President of the Republic of Kazakhstan, noting that the business community reacted positively to the new economic policy. "The key point of the Address is the development of industries, creating a multiplier effect, especially in terms of employment, improving the competitiveness of our business. In fact, they say that any assistance from the state will be in exchange for business to increase its competitiveness. We believe that this is correct", - he said.

Director of the Department of Tax and Customs Policy of the Ministry of National Economy of Kazakhstan Azamat Amrin announced the agency’s proposals to reform the special tax regime. "We conducted an analysis. 58.3% of all businesses that operate on the basis of a patent do not pay social tax, due to the excess of social security contributions in the amount of social tax. In this regard, we propose to abolish the social tax in the patent and to make the rate 1%", - he said.

The official noted that he also proposes to establish uniform size limits of revenues and number of employees for LE and SP (on the basis of SP): revenue - 100 million tenge, the number of employees - 30.

In addition, it is proposed to abolish the regime from 2020 due to the introduction of universal declaration of income and expenses.

Instead of the simplified declaration, it is proposed to introduce the simplified procedure of calculating income and expenses.

The ministry believes that the need to preserve the STR on the basis of EZN until 2020 due to the introduction of universal declaration of income and expenses. At the same time cancel the social tax for the entrepreneur himself and for staff of farms, who apply STR based on EZN; to allow to carry out other activities to keep separate tax accounting.

Regarding special regime for producers of agricultural products, aquaculture production (fish farming) and agricultural cooperatives, according to Amrin, it is proposed to exclude VAT exemption, as it contradicts to WTO requirements. At the same time preserve the concessions for CIT, social tax, the tax on vehicles and property within the frames of STR for agricultural producers up to 80%. In addition, to eliminate restrictions on the use of CHP (affiliation with other legal entities, applying the CHP, with divisions and subsidiaries, non-residents).

Deputy Chairman of the Board of NCE Rustam Zhursunov expressed his opinion on the proposed changes. "You offer threshold regime on the basis of the simplified declaration - 4200 MW, which corresponds to 102 million tenge. In our opinion, the threshold is quite small because the average when it comes to 100 million tenge, and if you take the monthly turnover, it is quite a small amount, taking into account the fact that 30 people are employed. If we are talking about small production facilities, there still is the cost of production", - he said.

"I remember 2000, when we discussed with you the first Tax Code, and came to the question of the introduction of social tax. It went instead of all the funds, we have combined it into one tax to simplify the tax calculation. Now we find ourselves in a very interesting situation where the social tax remains, and those funds, which we previously combined, are again established in parallel. Frankly, this causes resentment. If you enter the funds, then let's remove the social tax. We believe it is unfair", - said Deputy Chairman of "Atameken".

In addition, Zhursunov noted that one of the targets of the new Tax Code, the Ministry shall consider the shift of the self-employed from the shadow.

The member of the Presidium of NCE Raimbek Batalov in his speech spoke about the importance of the development of a consolidated position of the business. "We need to carefully calculate how it will fall on the shoulders of business. Maybe on some major issues to take certain areas and to launch it there in the pilot mode and to see how it will work", - he said.

The head of the Union of Potato Breeders Kairat Bisetaev, in turn, commented on the application of the tax regime on the basis of payment of the single land tax.

The fact is that Article 568 of the Tax Code of Kazakhstan amended the subparagraph 3) of paragraph 1, excluding the reference to article 442 of the Tax Code of the Republic of Kazakhstan. This led to the situation where registration as a VAT payer applies to peasants and farmers when they reach the minimum turnover of 30 000  MCI (68 million tenge). Thus, it has deprived most of the peasants and farmers the opportunity to work within a special tax regime on the basis of payment of the single land tax.

Bisetaev noted that SLT regime is simple and understandable for farmers. Moreover, in 2015 the use of this regime was already restricted by limiting the total area of ​​agricultural land, at which can operate a farmer paying SLT. So, for the North Kazakhstan the area is 3500 hectares, for Western Kazakhstan 1500 hectares, for South Kazakhstan 500 hectares. More than half of the farms, which correspond to the limit of land area, prescribed in the Tax Code, now under another article of the same Tax Code will be forced to go on the full tax accounting. Before the end of the first quarter of this year farmers will have to find thousands of accountants and to pay taxes, which is tens times higher than SLT.

"There are examples when regional tax committees are putting pressure on farmers, in order to force them to submit an application and to shift to the general established regime", - he said.
Bisetaev sees the decision of the situation in the introduction of a moratorium on the Article 568 of the Tax Code, regarding the use of 30 thousand MCI for farms up before the adoption of the new Tax Code.

"We offer 2 options. 1) Leave the existing regime of SLT. But we do offer to the ministry to increase gradually its rate, at least 5 times. We know that we can do it. We are ready to do it. 2) As part of the SLT to introduce simplified accounting and tax reporting, that is a very simple and clear for every peasant", - said the head of the union.

Nurzhan Altaev commented on Bisetaev’s proposal for a moratorium on Article 568. "We propose to come up with a consolidated position of the Committee to the Government. Today we will sign the protocol, we will forward it and we will raise this issue", - he said.
Following the meeting, it was decided to take note of all the comments and suggestions voiced by the business community; departments of taxation, agriculture and food industry of NCE RK "Atameken" were instructed in 10-day period to work out voiced proposals and to submit them to the MNE RK.