Ablay Myrzakhmetov gave a perspective of entrepreneurship development in Kazakhstan
Last Wednesday, Elbasy Nursultan Nazarbayev gave some instructions during the meeting of the Political Council of the Nur Otan Party.
Ablay Myrzakhmetov, a member of the Political Council of the party and chairman of the Atameken National Chamber of Entrepreneurs shared his vision and perception of the event in an interview with inbusiness.kz.
- Ablay Isabekovich, a lot of attention on the eve of the meeting was focused on the possible early parliamentary elections. However, the First President clearly stated that the elections would be held in due time, and called on colleagues to strengthen their work. What are the prospects for Kazakhstan on the political field, and what is the role of the Nur Otan party in it?
- The activity of the Nur Otan party fraction in the Mazhilis will be increased. The government will first discuss with the fraction key draft laws and the budget, which will be adopted only after the debates and discussions. Thus, the system of checks and balances between the branches of government will be strengthened.
- What do you remember most of all from Nursultan Nazarbayev's speech in the economic sphere?
- The First President said that we should set a more ambitious goal - to achieve economic growth of 7.5%. Is it achievable? Of course, it is a very difficult task, a high standard. This will require from all branches of government, first of all from the Government, well-coordinated and effective work.
- This year, the International Monetary Fund has repeatedly downgraded the global economic growth forecast, motivating the intensified trade conflicts. What goals and objectives should Kazakhstan set in trade?
- Two key issues worry business: the markets and availability of cheap and long term loans. We need to grow. Kazakhstan is a large country by territory, but the market capacity is small. The majority of the population has low purchasing power.
To increase our production, we need to protect our domestic market from counterfeiting and unfair competition, to study the measures of state support in neighboring countries (Russia, Belarus, Uzbekistan) and compare them with the measures of state support in our country.
Nobody asks for nice conditions, but we have to protect our market with all possible measures that exist. These are seizures, antidumping investigations, technical regulation. For example, the Rospotrebnadzor constantly imposes bans on imports of one or another product, finding inconsistencies with technical regulations.
I have recently visited Kostanay with the Prime Minister. The head of the Bayan-Sulu factory said that the EAEU strictly monitors the use of trans fats in confectionery products. And we do not have an agreement with Uzbekistan, which has up to 80% availability of trans fats in confectionery products. Somebody should have to keep an eye on this.
Will the new Ministry of Trade justify the tasks assigned to it? They have no choice. This is today's agenda.
Secondly, we need to go for export. There is no need to invent anything here, we have clear markets. We need to clearly define where we are strong, what we produce. It is important to increase the volume of non-raw products. For example, China, which imports food worth 125 billion US dollars a year. We have calculated that the enterprises of Kazakhstan can earn 15 billion dollars out of these 125 billion dollars because we produce these products and can export them there. We need the coordinated work of all relevant ministries, development institutions, and businesses. We need to make our way into the Chinese market. It is quite possible to export products worth 3-4 billion US dollars of processed agricultural products to China. If we do it, it will double the gross agricultural product.
- Nursultan Nazarbayev instructed the Nur Otan’s Political Council to work on the issues of SME support. Can you share the details of this initiative?
- At a meeting of the Nur Otan Political Council, the Elbasy proposed tax incentives for businesses. We need to reduce taxes on the payroll. If we calculate all taxes and deductions, we get a fairly high load on the payroll - 31%. These are income tax, pension, and social contributions, Mandatory social health insurance (MSHI). If we add the planned 5% of pension deductions and a further increase of contributions to the MSHI, it will be 38%. Employers will go to the grey zone, and employees will receive their salaries in envelopes. We support the Talap Center's proposal to combine all these taxes and contributions into a single social tax of 20-25%, based on the experience of Georgia and other countries. Then businesses will have more incentive. Everyone will win.
This is a serious issue. Of course, there will be budget revenue shortfalls, but the effect will be greater. By trusting the business and creating incentives, we will get more returns.
- Business raises a question regarding the introduction of 5% of Mandatory pension contributions of the employer, the Atameken NCE RK also expressed its position on this issue, what is the situation?
We work constructively with the authorities, we can't show ultimatums, threaten with rallies. There was criticism in social networks why the Atameken does not rally. I will say for sure: this is not our style. The Atameken is not a political organization, we work in a constructive field. We have no right of veto. A month ago, we reminded the Government of our position on this issue. We have been heard, and in early September we are waiting for a positive response on this issue. Let us be a little patient.
- By the way, could you name the counterarguments to the criticism on social networks payment regarding the membership fees?
- According to the law, contributions are mandatory, but in fact, they are paid by those who consider it necessary. This is not a tax. We specifically refused to allow the tax authorities to administer our contributions. It takes time to build a culture of trust in business so that they understand what they pay for and what services they receive.
For all these 6 years we haven't sued anybody, we haven't had any penalties. The fee paid is deducted: if you have paid the fee, it will be deducted from your corporate tax.
Besides, only 2% of the more than 1.2 million subjects pay, which is 23,000-24,000. These are those enterprises with annual turnover which exceeds 144 million tenge. That is, small businesses, individual entrepreneurs, farmers - 98% of entrepreneurs are not payers, there is no load for them, but at the same time, they receive the full range of services free of charge, from the protection of their rights to consultations.
Last year, 65% payers out of these 2% payers paid the membership fees. All these years we have been using the method of persuasion. In the first year, mandatory membership fees were paid by 40%, which means that every year we increased the loyalty of our taxpayers. And we are grateful to them. And the most important thing is that the decision on contributions is made neither by officials, nor by employees of the Atameken NCE RK, but by the Atameken Congress.
That's why talking about forced payment is speculation. Last year, there were proposals for everyone to pay a little bit, but the majority at the Atameken Congress decided to leave it as it is.
- What is being done in terms of the growth of trust in the Atameken NCE RK on the part of the business? There is an idea to introduce election procedures and mechanisms to the management of Atameken.
- I get this question a lot. To hold elections, we have to ensure the participation of 1.2 million entrepreneurs. This is a serious process. I think that there should be no rush here.
Now we are establishing contact with every entrepreneur. We plan to complete this work by the end of the year. It is important that every businessman knows about his right to vote, that he can vote, and can be elected. Then it will be a real democracy. It is just populism to announce elections without preparatory work.
Today, we have already talked with 600,000-700,000 entrepreneurs. When the base is updated, we will start the election process next year. I think it will be like "primaries", registration and voting on the Internet. The procedures are being prepared. We will have a Congress in October and this issue will be put on the agenda.
Secondly, at the upcoming Congress, we will discuss the issue of associations. Now there is a consensus between regions and industries, half of the Congress delegates are elected from among the members of the regional councils, and the other half from accredited industry associations. They have equal votes. Business in the regions raises the question: they do not know the majority of accredited associations, there are no branches of associations in the regions, what is the membership base in these associations. Therefore, I think that the issues of qualification requirements for accredited industry associations will also be discussed at the forthcoming Congress.
- Nevertheless, a certain part of the society periodically has a question about the expediency of such an institution as the Atameken NCE RK.
- The Atameken NCE RK as an establishment has succeeded. Over the past 5-6 years, we have grown rapidly, reached the regions, and the government has delegated many functions to us. The Atameken issues certificates and teaches entrepreneurship. Everything concerning the service support of business under the state programs has been transferred to the Chamber. It is a great honor and a great responsibility. We do not have excessive confidence. We see our weaknesses, drawbacks and are in touch with the business, we understand that we need to constantly improve our work. At the same time, we would like the entrepreneurs to evaluate our activity objectively.
Criticism shows that Atameken has become a serious force. People want to be elected to leadership. They understand that we are partners with the government and they count on us.
- What is the National Chamber doing to establish a full-scale dialogue not only with the government but also with business?
- We are seriously preparing for the digital format, which will provide effective feedback to our members. A lot of work is being done; we want all the services, all our communication to be built through the mobile application. We will make sure that every entrepreneur in his industry receives the information and services he needs. He cannot read, for example, the entire Tax Code.
Our Digital Atameken project will be presented to Congress delegates in October. This system is now being actively tested. At the Congress, we will listen to the comments and suggestions of our members, after which we will finalize the system, and in 2020 we will launch a full-scale digital format of work.