Possible Increase of VAT Rate in Kazakhstan

The Ministry of National Economy of Kazakhstan proposes gradually increasing the standard VAT rate. This significant change, presented through the amendment of the Tax Code, has been addressed by the Vice Minister of Economy at the short briefing after the government consultations. 

Timeline 

Based on the draft version of the Tax Code amendments, the VAT rate increase should be gradual, resulting in a rise from 12% to 16% starting in 2025. 

Impact 

Government officials see the necessity to increase the VAT rate primarily based on two highly significant facts:

1. The VAT rate in Kazakhstan is significantly lower compared to European Union countries and neighboring countries with which the KZ businesses are mainly competing;
2. An increase in the VAT rate will permit KZ businesses more “level” playing field when competing with foreign exporters; if the rate increases, their “playing” field for uncompetitive prices will decrease or even diminish to some extent in some cases.