On 25^th of May was held the meeting of the Council for the Protection of the Rights of Entrepreneurs and Counteracting Corruption of NCE RK "Atameken”

The practice of protecting the rights and legitimate interests of entrepreneurs in investigating criminal cases against counterparts of "pseudo-enterprises" was the main one on the agenda of the meeting of the Council for the Protection of the Rights of Entrepreneurs and Anti-Corruption of NCE RK "Atameken", which was held in the format of a videoconference.

"The analysis conducted on appeals of entrepreneurs and regional chambers of entrepreneurs to illegal actions of state revenue authorities related to additional taxation on transactions with "pseudo-enterprises" showed that over the period from 1^st of January to 15^th of May 2017, the National Chamber of Entrepreneurs received over 80 applications from entrepreneurs related to additional taxation on transactions with "pseudo-enterprises" in excess of 3 billion tenge", - opening the meeting, the moderator of the meeting noted, the chairman of the Council for the Protection of the Rights of Enterprises and counteracting corruption of NCE RK "Atameken" Kairbek Suleimenov.

Rustam Zhursunov, Deputy Chairman of the Management Board of NCE RK "Atameken" and Valentina Gerashchenko, Deputy Head of the Regional Chamber of Entrepreneurs of Akmola region, informed in detail about the problems in the field of taxation in transactions with "pseudo-enterprises".

"False entrepreneurs are fined, and their numerous counterparties are forced to pay taxes, fines and penalties. As a matter of fact, taxes are collected from counterparts in the framework of criminal legal proceedings by only acknowledging the guilt of the pseudo-entrepreneur. At the same time, the guilt of counterparties in tax evasion in most cases is not confirmed either by a verdict or by a court ruling", - said Rustam Zhursunov.

Outside the field of view of criminal prosecution bodies are unfair entrepreneurs who use the services of pseudo-enterprises.

During the discussion, the Council stated that the practice of applying Article 215 of the Criminal Code of the Republic of Kazakhstan (pseudo business) is putting serious pressure on business. False entrepreneurs are fined, and their numerous counterparties are forced to pay taxes, fines and penalties. Outside the field of view of criminal prosecution bodies are unfair entrepreneurs who use the services of pseudo-enterprises.

In turn, the Commissioner for the Protection of the Rights of Entrepreneur of the Republic of Kazakhstan, Bolat Palymbetov, noted that overall statistics show a decrease in the number of offenses.

"In general, legal statistics shows a decrease in the number of offenses in the economic sphere. Compared with the first quarter of last year, this year the number of criminal cases for economic crimes was reduced fourfold. This indicates that the work is being done in the right direction", - explained Bolat Palymbetov.

"Atameken" developed proposals for "reformatting" Article 215 of the Criminal Code, changing its name and content.

Instead of pseudo-entrepreneurship, it is proposed to introduce formal structures - illegal formation of a legal entity, i.e. on nominee name, and the illegal use of documents for the formation of such a legal entity. These facts are easy to prove.

At the same time, it is necessary to amend the provisions of the Tax Code (art. 115 "non-deductible expenses" and art. 255 "value-added tax not subject to classification") and grant the tax authorities the right to adjust independently taxable income in case of revealing the facts of business transactions with "cash" firms. Reversal of taxes should be transferred from the orbit of criminal proceedings to tax administration.

"If some article condemns bona fide entrepreneurs, then it must be changed. This is my unequivocal opinion. We need to remove all barriers that hamper the development of mass entrepreneurship", - Bolat Palymbetov said.

Thus, the tax authorities will receive an effective mechanism for additional charging of taxes, fines and penalties in the process of tax administration, without involving bona fide entrepreneurs in the orbit of criminal prosecution.

At the same time, honest businessmen will have the opportunity to prove the validity of their transactions, using all legal instruments for the protection of their rights provided for by law (pre-judicial and judicial mechanisms of appeal in civil proceedings).

Under the above approach, the fight against pseudo-entrepreneurship will be brought to a new qualitative level. And the existing system of investigation of this category of criminal cases is subject to reform.

The Council noted that the legislation on taxation of counterparts of "false enterprises" should guarantee the support of domestic small and medium-sized businesses, which corresponds to the spirit of instructions of the President of the Republic of Kazakhstan N.A. Nazarbayev on the strict observance of the rule of law.

Following the meeting, the Council made recommendations to the Government of the Republic of Kazakhstan. Ministry of Finance and other interested state bodies.