Minister of Finance of the Republic of Kazakhstan Madi Takiyev reported at a Government session on the ongoing work to implement the President’s instructions to reduce the share of the shadow economy.

He noted that by the end of 2024, the shadow economy level stood at 16.7%, down by 0.9 percentage points compared to 2023.

The most noticeable improvements were observed in sectors such as domestic trade, education, and agriculture.

“At the same time, challenges remain, and the Ministry of Finance is carrying out systematic work to address them. Since January of this year, the Ministry has been designated as the main government body for combating the shadow economy. Accordingly, new approaches have been developed — now coordination and policy in this area are the responsibility of the Ministry of Finance,” Madi Takiyev said.

He added that mechanisms for assessing the achievement of KPIs in the development plans of government agencies have been approved; most agencies have now added a function for combating the shadow economy in their respective sectors; and roadmaps have been developed for industries with the highest levels of shadow activity.

Modern digital tools are being introduced into tax administration. The key project is the Smart Data Finance system, which uses artificial intelligence to analyze large datasets of citizens and businesses, detect tax evasion schemes, and form digital taxpayer profiles. Currently, the system is connected to 74 data sources, and another 30 integrations with government bodies, second-tier banks, and organizations are planned by the end of the year.

The Minister emphasized that tax minimization and evasion schemes remain prevalent in the small and medium business sector — for example, registering several companies at the same legal address.

More than 20,000 companies are registered at about 3,500 addresses, with total tax arrears amounting to 60.4 billion tenge. Tax inspections are being conducted to determine their actual activities.

Some entrepreneurs are also violating cash register requirements, directly impacting tax revenues to the state budget.

“Particular attention should be paid to increasing public awareness about the importance of demanding fiscal receipts from businesses, as this primarily protects their consumer rights,” Madi Takiyev added.

According to the Ministry, in 2024, it was found that more than 401,900 cash registers, or 39% of the total registered, did not issue receipts. Moreover, over 16,700 cash registers failed to issue receipts despite receiving payments through POS terminals and QR codes. Around 260,000 taxpayers were identified who either issued only one receipt per day or recorded identical daily revenues.

“This year, the situation has improved, and violations are decreasing. Of the 400,000 cash registers, 70,000 entrepreneurs have started issuing receipts. Work with them continues. Thus, the introduction of these digital solutions will allow prompt detection and prevention of such cases,” Madi Takiyev explained.

During the session, new digital tax administration services were presented:

• Biometric identification in the electronic invoicing system prevented the issuance of fake invoices totaling over 33 billion tenge;

• Automated control through the E-Tamga project allows early-stage verification of VAT balances and suppression of gray schemes — 250 million e-invoices and 500 million payments have already been processed, with an expected budget effect of up to 100 billion tenge per year;

• Since 2024, a pilot project called “Digital VAT”, implemented jointly with the National Bank, uses the digital tenge for transactions, blocking money from being diverted into the shadow economy and ensuring transparency throughout the supply chain.

To enhance this work, the Ministry of Finance proposes expanding the use of the digital tenge to other sectors at high risk of shadow transactions.

As part of systemic measures against the illicit circulation of excisable goods, requirements for the sale of marked products have been tightened, and liability for violations of labeling rules has been introduced.

For example, in the first nine months of 2025, over 1 million liters of alcohol, 6.6 million packs of cigarettes worth about 4 billion tenge, and 55.6 thousand tons of petroleum products were seized. Additional excise taxes of more than 7 billion tenge were assessed through inspections. Fifty-five cases of illegal drug imports totaling 152 kg were prevented.

Madi Takiyev also stressed that, in line with the President’s instruction, the creation of an AI competence center will become a key priority. The introduction of AI technologies in inspection and scanning systems will help detect undeclared goods and minimize the human factor in customs control. Through the SmartCargo platform, advance information on rail and air cargo will be collected and transmitted to the KEDEN information system for automated customs declarations.

Integrations of KEDEN with the Ministries of Agriculture, Trade and Integration, and Transport are also underway. This will allow a full transition to a paperless workflow, shorten customs processing times, and reduce corruption risks and shadow operations.

It was reported that since the beginning of the year, over 1,500 administrative cases have resulted in fines totaling 5.9 billion tenge. Cases of undeclared foreign currency exports worth about 1 billion tenge have been prevented.

Currently, the State Revenue Committee faces the task set by the Head of State in his Address — to become the flagship of digitalization among government bodies, with the primary focus on supporting conscientious taxpayers.

“In this regard, I ask for your support in integrating our systems with those of the Unified Accumulative Pension Fund, financial sector organizations, authorized government bodies, and other institutions with relevant data. Information from these sources will make it possible to identify persistent tax evaders without putting pressure on compliant businesses,” Madi Takiyev said.

At the same time, all Committees of the Ministry are focused on systematic monitoring of the targeted use of budgetary funds. The Internal State Audit Committee is implementing a pyramidal analysis of budget fund movements.

For example, in the agro-industrial complex, cases of misuse of budget loans and subsidies have been identified, including loans for livestock and equipment purchases without confirmation of transactions, misappropriation of funds, and placement of credit funds on deposits.

In this regard, it is proposed to revise the system of state support measures, providing assistance only for actually produced goods.

In conclusion, Madi Takiyev presented proposals to further reduce the shadow economy, including:

• Strengthening digitalization and information exchange between sectoral ministries;

• Developing border checkpoints and related infrastructure for carriers;

• Expanding the use of the digital tenge to public procurement and other sectors of the economy vulnerable to shadow transactions.

#Digitalization #Economy #Government session #President's instruction

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