In the Address to the People of Kazakhstan “Growing Welfare of Kazakh Citizens: Increase in Income and Quality of Life,” the Head of State instructed to hold a tax amnesty for small and medium-sized businesses from Jan. 1, 2019, by cancelling the accrued fees and fines, subject to the taxpayer paying the principal amount.
Sultangaziyev said that the Ministry of Finance had developed relevant amendments to the legislation for tax amnesty, which are currently under consideration by the Senate of Parliament.
“The draft amendment provides for the cancellation by Dec. 31, 2019, of fines and penalties to small and medium businesses, subject to repayment of the principal debt which was available Oct. 1, 2018. In this case, the fines will be cancelled as of Oct. 1, 2018, and the penalty — accrued before the date of payment of the principal debt,” explained Sultangaziyev.
According to the chairman, the cancellation of penalties and fines will also apply to taxpayers who, in accordance with the Tax Code or the legislation on rehabilitation and bankruptcy, are deferred to pay taxes or are in a rehabilitation procedure.
It should be noted that the following are not subject to amnesty: large taxpayers subject to monitoring; subsoil users, with the exception of subsoil users, being such solely because of the possession of the right to extract groundwater, therapeutic mud; producers of excisable goods; individuals who are not engaged in entrepreneurial activities or private practice.
According to preliminary calculations carried out by the Ministry of Finance, 90,077 subjects of medium and small business fall under the amnesty, and as of Oct. 1, 2018, they have tax debts of 340.6 billion tenge. At the same time, the total amount of penalties to be written off is 122.9 billion tenge, fines — 7.3 billion tenge, which will be cancelled provided that the principal debt is paid for 210.4 billion tenge.
The committee chairman informed that all the taxpayers who had previously been included in the lists of taxpayers subject to tax amnesty for today have been sent brief information to their Taxpayer’s Offices. To those who do not have a taxpayer’s office, from Jan. 1, 2019, a mailing list will be organized to the residential addresses.
“We believe that holding a tax amnesty will be an effective mechanism for supporting entrepreneurs and will be an incentive for the payment of the principal debt and complete relief from the tax burden. In general, this action will allow entrepreneurs to reboot their production, save and expand jobs, increase production, and thus contribute to improving the welfare of Kazakhstan, their incomes and quality of life," said Sultangaziyev.
Recall that in the history of independent Kazakhstan, tax amnesties for writing off penalties and fines to improve the financial and economic activities of enterprises were conducted three times (in 1997–1999, in 2011 and 2015), each time providing an opportunity for businesses to get rid of accumulated debts and continue their legitimate commercial activities .
According to the Ministry of Finance, within the framework of the two last shares (2011 and 2015), the debts were written off on penalties and fines totaling 143.7 billion tenge, including in 2011 — for 23.1 billion tenge, in 2015 — 120.6 billion tenge.
Sultangaziyev noted that these shares had a positive effect: 67% of the participants in the latest tax amnesty of 2015 do not have tax debts. These are more than 680 thousand taxpayers, of which over 17 thousand are legal entities, 105 thousand are individual entrepreneurs, 557 thousand are individuals.