In a recent letter addressed to a group of Senate deputies, the Prime Minister outlined several key provisions in the proposed new Tax Code. These changes aim to modernize and simplify tax administration while addressing specific sectors and taxpayer categories. Here are the significant updates:
Corporate Income Tax for the Social Sector
The proposed Tax Code suggests establishing a corporate income tax rate of no more than 10% for social sector organizations. This adjustment would allow these organizations to distribute dividends to their founders, potentially fostering more robust development and sustainability within the social sector.
Personal Income Tax Exemptions
Under the new tax provisions, pension payments from the Unified Accumulative Pension Fund will be exempt from personal income tax, with the exception of payments made to individuals leaving Kazakhstan and inherited funds. This exemption aims to provide financial relief to retirees and their beneficiaries.
VAT Payment System “e-Tamga”
A significant innovation in the proposed Tax Code is the introduction of the “e-Tamga” system. This new VAT payment system will utilize simple digital solutions, where all VAT payments will be made through electronic VAT invoices. The primary goals of “e-Tamga” include:
- Enhancing Transparency: By eliminating fictitious transactions and reducing the possibility of tax evasion.
- Automating VAT Refunds: Simplifying and speeding up the VAT refund process.
Initially, “e-Tamga” will be implemented on a voluntary basis in a pilot phase, allowing businesses to adapt and refine their processes before a full-scale implementation.
Regulations for Pilot Projects
The proposed Tax Code includes detailed provisions for pilot projects in tax administration, specifying:
- Rights and Obligations: Clearly defined for participants and state revenue authorities.
- Duration: Limited to three years.
- Voluntary Participation: Ensuring participants are not obligated to join.
- Penalty Exemptions: Participants are exempt from penalties during the pilot phase.
- Public Notification: Mandating the announcement of pilot projects through mass media.
These measures are designed to test new tax administration approaches effectively without imposing undue burdens on participants.
Desk Tax Review
This year, the format of desk tax reviews has transformed into an automated service model. Key features include:
- Automation: Reducing human intervention and simplifying notification procedures.
- Risk-Based Notifications: Recognizing unfulfilled notifications only for high-risk violations, while medium-risk notifications are automatically marked as fulfilled unless exceptions apply.
Additionally, the new Tax Code proposes changing “elimination of violations” notifications to “potential discrepancies” notifications, reflecting a more lenient approach aimed at easing the administrative burden on taxpayers.
Vehicle Tax
The new provisions propose a differentiated approach to vehicle taxation based on the vehicle’s year of manufacture. Older vehicles would benefit from reduced coefficients, potentially encouraging the use of newer, more efficient vehicles.
Excise Tax on Sugar-Sweetened Beverages
The government considered introducing an excise tax on sugar-sweetened beverages but ultimately rejected the proposal. The projected 26.4% reduction in production and the need to balance economic interests led to this decision, reflecting a cautious approach to fiscal policy.
