Kazakh Economy Ministry proposes 15% tax on annual incomes above 40 mln tenge

ASTANA. Nov 17 (Interfax) - Kazakhstan's Ministry of National Economy has presented the draft of the new Tax Code the presidential Council of Foreign Investors.

The proposed changes include a two-tier scale for individual income tax rates on salaries. "For incomes up to 40 million tenge per year, the tax rate will remain at 10%. Any income exceeding this threshold will be subject to a 15% tax rate," the ministry said.

The introduction of a "luxury tax" was also under discussion. "This would entail imposing a 10% excise tax on costly alcohol and tobacco products, along with exploring taxation approaches for high-value property exports such as yachts and aircraft," according to the statement.

Additionally, the ministry proposed raising VA) from 12% to 16% and employing a progressive tax system for the corporate income tax in highly profitable sectors of the economy.

Alibek Kuantyrov, Minister of National Economy, said that "these changes aim to simplify the taxpayer's responsibilities and create a stable, straightforward, and user-friendly tax system. They are not expected to exert significant pressure on inflation. Instead, they are anticipated to enhance the competitiveness of Kazakhstan's products and contribute to price stability."

The VAT increase will only directly impact 5.5% of taxpayers, with 40% of them, generating a gross product of 17.5 trillion tenge, currently not paying VAT.

The luxury tax will target imported expensive property, including luxury cars, private jets, and yachts, when they enter the country. The new Tax Code is scheduled to take effect in 2025.