The share of SMEs in the economy of Kazakhstan by 2030 will amount to 40%. This was announced by the Minister of National Economy of the Republic of Kazakhstan Alibek Kuantyrov at a meeting of the Government.

The sphere of entrepreneurship, able to adapt to changing market conditions and develop independently, is the main factor of sustainable development of the national economy. According to the head of the Ministry of Economy, the creation of a favorable business climate as a basis for macroeconomic stability is one of the priority tasks of the Government.

"Despite difficult external conditions, real economic growth in 2022 amounted to 3.3%," Alibek Kuantyrov said.

He said that to date the number of operating SMEs has increased by 23.4% and amounted to about 2 million enterprises. The total number of employed in this sector has increased by more than 18% and reached 4.1 million people. Thus, about 40% of all those employed in the economy work in SMEs.

"As a result, the share of SMEs in the economy increased from 33.3% to 36.5%. The volume of output by SMEs increased by 28% and amounted to over 59 trillion tenge," the Minister of National Economy said.

In order to reduce administrative barriers, the Government is working to introduce a new regulatory policy in the field of entrepreneurial activity. As part of this work identified 10.1 thousand unnecessary requirements for business. Today about 90% of such requirements have been canceled at the subordinate legislation level. For the remaining 10%, a single pool of amendments to legislative acts has been formed, which is included in the draft Law on the conduct of business, which is in Parliament.

"The work carried out by eliminating archaic, irrelevant requirements will ensure transparency and simplification of many procedures for entrepreneurs, thereby improving the business climate and investment attractiveness," Alibek Kuantyrov emphasized.

The Government is also working on the automation of risk management systems in all areas of state control and supervision using artificial intelligence without human involvement. Last year 35 spheres of control were automated, by the end of this year the remaining 35 spheres will be automated.

"The automation of state control will ensure inspections without human participation starting from January 1, 2024, i.e. after the moratorium on SME inspections ends. This will streamline and focus control and supervision bodies on problematic business entities, reducing administrative pressure on law-abiding entrepreneurs. As a result of this work it is expected that planned inspections of business will be reduced by 2 times, and the number of those brought to administrative responsibility will be significantly reduced," the head of the Ministry of National Economy said.

Alibek Kuantyrov reported that in 2022 within the framework of SME support 46 thousand projects for the amount of loans over 1.3 trillion tenge were subsidized and guaranteed. For 5 months of this year subsidized and guaranteed more than 10.2 thousand SME projects for the amount of loans of more than 586 billion tenge. For the current year for these purposes allocated more than 266 billion tenge of budget funds, which is almost 96 billion tenge more than last year.

Further, the Minister of National Economy spoke about non-financial support for women's entrepreneurship through the Women's Entrepreneurship Development Centers, which provide a wide range of services to identify needs, conduct specialized training, business reviews, mentoring, as well as production and promotion of products from local raw materials within the framework of the "One Village - One Product" project.

According to the results of the first half of this year in such centers:

• 4,092 consultations were provided to identify problems and needs;
• 256 entrepreneurs were supported to participate in international projects;
• 7 exhibitions were organized with the participation of 169 local producers;
• 342 mentors were provided with mentoring.

According to Alibek Kuantyrov, since January 1 of this year the retail tax regime has been introduced on an indefinite basis. The list of activities has been expanded from 116 to 190. This applies to entrepreneurs in the sphere of retail trade and provision of services to the population.

"Application of the regime is allowed at income up to 2 billion tenge. Taxpayers are exempt from VAT and social tax. The tax rate is flexible: in the amount of 4% of turnover. At the same time, the rate can be reduced to 2% based on the decision of the Maslikhat. In addition, since this year a single payment from the labor payment fund for micro and small businesses has been introduced. The total rate is reduced from 34.5% to 20%. Instead of 6 payments 1 payment will be paid," the Minister of National Economy noted.

Currently, work is underway to develop a draft of the new Tax Code. Special attention is paid to simplification and digitalization of tax administration. To this end, proposals have been developed to cancel the provision of some declarations.

"This concerns the abolition of calculation of current payments for property tax and land tax at tax liabilities of less than 1 million tenge, as well as the abolition of calculation and declaration of transportation tax for business entities," Alibek Kuantyrov said.

In addition, in case of non-payment of debts it is proposed not to close bank accounts, but to issue collection orders only in the amount of the debt. It is also proposed to assign inspections based on a new risk management system and the exclusion of scheduled inspections.

As noted by the Minister of National Economy, it is proposed to interact with the taxpayer only through the Taxpayer's Cabinet during the control. It is also envisaged a new approach in the administration of platform employment and the introduction of a mechanism for pre-filling of declarations based on the data of KKM, turnovers through POS-terminals and bank accounts.

"Withholding of tax by the platform holder is proposed for e-commerce," the head of the Ministry of National Economy said.

According to him, work to improve the business climate is carried out on a continuous basis, which allows to set in the medium term to achieve the target indicator of 40 percent share of SMEs in the economy of Kazakhstan by 2030. As noted Alibek Kuantyrov, this milestone is achievable and may be close to the indicators of advanced countries of the world.

#Digitalization #Economy #Ministry of National Economy #SME #Tax Policy