No VAT increase — Olzhas Bektenov at first session of renewed Government

The results of socio-economic development and implementation of the national budget for January 2024 were considered at the Government session of Kazakhstan. 

As reported by Deputy Prime Minister – Minister of National Economy Nurlan Baybazarov, during the reporting period, the growth rate of Kazakhstan's economy amounted to 3.9%. Among the industries, the best dynamics is demonstrated by construction (+12.8%), transportation and warehousing (+11.4%), information and communication (+10.6%), as well as manufacturing industry (+6.9). 

According to preliminary results, in 2023, foreign trade turnover increased by 3.2% to $140 billion. Exports reached about $79 billion, exports of processed goods reached more than $25 billion, and imports exceeded $61 billion. Overall, the trade surplus is equal to about $18 billion.

Finance Minister Madi Takiyev reported that the state budget received about 1 trillion tenge of revenues the plan was fulfilled by 111.5%. The republican budget was replenished by 521 billion tenge, local budgets received 526 billion tenge. The state budget expenditures were executed by 96.9%.

Heads of regions, which achieved the lowest development indicators by the end of January, also made reports at the meeting. Among them are Akim of North-Kazakhstan region Gauez Nurmukhambetov, Akim of Mangystau region Nurlan Nogaev and Akim of Atyrau region Serik Shapkenov. 

Prime Minister of Kazakhstan Olzhas Bektenov emphasized that the priority task of the Government for the current year and the medium term remains to ensure stable economic growth at a level of at least 6%. 

"I charge the Ministry of National Economy together with sectoral government agencies within a month to develop and approve a plan of priority actions to ensure economic growth at the level of 6% in the current year. It should contain specific and effective measures," Prime Minister said. 

At the same time, Olzhas Bektenov drew attention to the fact that the growth of investment in fixed assets in January amounted to only 0.6%. In his opinion, such a low indicator speaks about the poor performance of authorized state bodies and akimats.

"It is necessary to strengthen the activities of the Investment Headquarters, which has been given sufficient powers. The primary task of ministers and akims is to provide effective and efficient support for the implementation of investment projects," Prime Minister noted. 

He emphasized that, given the important role of investment as the main driver of GDP growth the building of a proper investment policy is a key factor.

"The coordinated work of the Government in this direction is to create an integral ecosystem of investment attraction, effective support of investment projects, as well as conditions for timely implementation of projects," Head of the Government said. 

For this purpose, he instructed to establish effective and stimulating KPIs to improve the performance of government agencies and development institutions, as well as their responsibility in case of failure to achieve the set target indicators.

"This will contribute to improving the investment climate and achieving real results," Olzhas Bektenov said. 

Another important factor of a successful economy is a strong and competitive business. Therefore, the development and support of entrepreneurship is one of the main tasks of the Government.

"Priority should be given to high value-added processing, as well as the export potential of manufactured products. Financial support should be provided proportionally depending on the level of technological complexity of production. That is, the more complex the production and more technological, the lower the loan rate or longer loan term," Prime Minister said.

He emphasized that domestic business should be provided with affordable financing, including through off-budget sources and expansion of guarantee mechanisms. This will allow local enterprises to successfully compete with foreign suppliers.

To support the development of medium-sized businesses, Olzhas Bektenov instructed to review the system of state support and accelerate the conclusion of agreements with the most successful medium-sized enterprises aimed at expanding production by 2-3 times.

"The completion this year of the moratorium on business inspections should not contribute to an increase in the administrative burden on entrepreneurs. The automated system of state control, which makes it possible to exclude the human factor, should be fully applied," he said.

Containment of price growth also remains a priority task for the Government. This year the task is to keep inflation within the corridor of 6-8%. To do this, government agencies must ensure the qualitative implementation of the Set of measures to control and reduce inflation.

"The head of state at the enlarged meeting noted that last year VAT amounting to about 600 billion tenge was not returned to business. At the same time advanced the budget with payments of 2024 to finance urgent expenditures. These are the results of improper planning, the revenue plan for 2023 was overestimated. This practice should not be repeated," Prime Minister emphasized.  

At the same time, he added that there would be no increase in VAT.

"On the instructions of the Head of State, there will be no increase in the rate of value added tax. We must look for other ways to replenish the revenue part of the budget. The Ministries of National Economy and Finance need to ensure quality planning of both expenditure and revenue parts of the republican budget. It is important to take effective measures to improve tax and customs administration, primarily through digitalization," Olzhas Bektenov said. 

According to the Prime Minister, it is important to strengthen financial discipline, to exclude unproductive expenditures and to increase the efficiency of state budget expenditures in general.

"I want to emphasize once again that we should make maximum efforts to ensure a high rate of economic growth. Each minister and akim of the region are personally responsible for achieving the set goals," he concluded.

#Olzhas Bektenov #The Prime Minister of the Republic of Kazakhstan #Economy #Government session

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