Wednesday, 29 July 2020, 16:57:58
Under the current conditions, the Government, on behalf of the Head of State, is actively implementing large-scale measures to preserve social and economic stability in the country. Today, the Minister of National Economy Ruslan Dalenov, as part of an online briefing, spoke in detail about all measures taken to support the economy and small and medium-sized businesses.
According to Ruslan Dalenov, the impact of global negative trends affects the economy of Kazakhstan since the beginning of this year.
“Kazakhstan, like all other countries of the world, is experiencing a decline in business activity against the backdrop of a combination of negative consequences from the coronavirus pandemic. The service sector suffered the most, where the decline was 5.6% over 6 months of 2020. At the same time, there is a steady growth in the real sector of the economy. The production of goods increased by 4.1%,” he said.
The main drivers were construction (+11.2%) and manufacturing (+4.8%). In the manufacturing industry, the growth was 4.8%, which was provided by the automotive industry (46%), pharmaceuticals (24%), the production of metal products (20%), light industry (8%), the production of rubber and plastic products (8%) and paper (15%).
Providing employment and social benefits to the population during an emergency
During the state of emergency, two packages of urgent operational measures were adopted (dated March 23 and 30, 2020) to stabilize the economy and support the population.
The measures are aimed at ensuring employment, monthly payments for loss of income, social benefits, housing construction, compensation for losses of tax revenues of the budget and other areas. All social obligations of the state are paid on time.
To ensure stability in the labor market, 1 trillion tenge was allocated under the new Employment Roadmap program. The implementation of this program will allow solving many pressing issues aimed at improving the quality of life of the population in the regions. This is a decrease in the number of emergency and three-shift schools, gasification, construction of high-quality local roads, modernization of engineering and communication infrastructure, as well as the provision of clean drinking water.
For example, as a result of the implementation of the gasification project in the Zhambyl region, more than 50 thousand residents of the villages of the Korday region will have access to natural gas. In the Kurmangazy district of the Atyrau region, construction of main water supply networks is underway to provide the population with drinking water.
Such projects solve urgent tasks to improve the living conditions of the population in every region of the country.
To date, 6.5 thousand socially significant projects have been selected for implementation with a plan to create 255 thousand jobs, including 15 thousand permanent ones on completed projects.
The implementation of about 5.9 thousand projects has begun, which created 123 thousand jobs.
The employment roadmap lays the foundation for the creation of over 100,000 permanent jobs in related industries.
More than 262 thousand people became participants in the Enbek State Program, of which about 184 thousand people were employed.
In order to modernize the transport infrastructure and provide employment for the population, within the framework of the Nurly Zhol state program, work is underway to build and reconstruct 5.5 thousand km of republican and 4 thousand km of local roads.
In total, 200 thousand people are involved in road construction work.
This year, funding for the Aul - El Besigi project to modernize the infrastructure of supporting rural settlements has been increased to 98 billion tenge.
Today, 920 projects are being implemented in 216 villages aimed at the development of transport (368 projects) and social infrastructure (223 projects), as well as housing and communal services (329 projects). More than 16 thousand people are employed in the implementation of projects.
To provide the population with high-quality housing and communal services, work continues to modernize the engineering infrastructure. Over 6 months of 2020, 800 km of water supply and sewerage networks have been reconstructed.
In addition, 21 projects for gas supply to the regions are being implemented for 13.7 billion tenge.
In general, within the framework of government programs, measures to create employment by the end of 2020 will cover more than 1.2 million citizens.
In addition, 140 thousand memoranda were signed between akims, employers and trade unions to save more than 2 million jobs and stable wages. Roadmaps have been concluded for a controlled flow of labor resources with more than 1,000 large enterprises employing more than 1.1 million employees.
Expanded instruments of concessional lending to SMEs
The volume of lending was increased by 1 trillion tenge. This is an additional 400 billion tenge under the Economy of Simple Things program and new 600 billion tenge through the National Bank.
The coverage of industries has been significantly expanded under the programs Business Roadmap and Economy of Simple Things. The final rate for borrowers is 6%.
Since the beginning of the year, more than 1,700 projects worth 112 billion tenge have been financed under the Business Roadmap 2025 State Program.
Under the state program Enbek, 5,216 projects were implemented, 22.9 billion tenge of loans were allocated. Since the beginning of the year, about 1,500 projects worth 382 billion tenge have been financed under the Economy of Simple Things program.
Along with this, the National Bank launched a program of concessional lending of 600 billion tenge to small and medium-sized businesses, without industry restrictions, including for individual entrepreneurs.
Loans are issued for 1 year at 8% to replenish working capital. Since the beginning of the year, 2,570 projects have been financed under this program for the amount of 347 billion tenge.
In general, within the framework of four programs (Business Roadmap-2025, Enbek, Economy of Simple Things, the National Bank program), more than 11 thousand projects have been financed in the amount of 864 billion tenge since the beginning of the year. Today, there are still 3,259 projects under consideration for the amount of 660 billion tenge.
About 700 thousand businessmen exempt from payments to budget
Until June 1, 2020, a deferral for the payment of all taxes and social payments has been introduced for SMEs. In the most vulnerable sectors of the economy, the property tax rate has been zeroed by the end of the year. For producers of agricultural products on agricultural land until the end of the year, the land tax rate has been reduced to zero. In the field of livestock breeding, the possibility of paying VAT by the import offset method is provided, which means an actual exemption.
The VAT rate has been reduced from 12% to 8% for socially important food products until October 1, 2020.
In the 29 most affected sectors of the economy, by October 1, 2020, zero rates were established on taxes and social payments from the wage fund. These are individual income tax and compulsory employee pension contributions, social tax and social security contributions, contributions and contributions to compulsory health insurance.
In general, the measures covered about 700 thousand taxpayers in the amount of about 1 trillion tenge.
In addition, earlier in the period of the state of emergency, to prevent the growth of the debt burden of SMEs, deferrals were provided for payments of the principal debt and interest on loans for 90 days.
Increasing self-sufficiency of Kazakhstan’s economy
As Dalenov noted, today it is especially important to take active measures to increase the self-sufficiency of the economy and unlock the potential of domestic demand.
Today, investment projects are being actively implemented to substitute the main types of food products. This year, the implementation of 44 projects in the agro-industrial complex has begun, aimed at import substitution and leveling external shocks. These are poultry factories, meat processing plants, dairies, sugar and fish factories, as well as intensive apple orchards.
Recovery of economic growth
Today, the Comprehensive Plan to Restore Economic Growth by the end of 2020 is being implemented.
The comprehensive plan was formed taking into account the proposals of NCE Atameken and entrepreneurs from all regions of the country and takes into account the most pressing and problematic issues of concern to domestic business.
The comprehensive plan includes financial and non-financial measures in 10 areas. These are the manufacturing industry, mining and metallurgical and agro-industrial complexes, the construction industry, civil aviation, logistics, tourism, SMEs and the service sector, as well as social sectors. For each industry, measures are already being implemented to promptly resolve urgent issues.
In the implementation of the Comprehensive Plan, an urgent package of amendments to the legislation was adopted, including tax incentives. To replenish the working capital of companies in the manufacturing sector, a transfer from the 2nd and 3rd quarters of 2020 to 2021 is provided for 33% of the amounts of advance CIT payments, and the amount of simplified VAT refund has been increased from 70% to 80%.
In order to support the air transportation industry, land tax and land use fees for airports, as well as VAT on imports of aircraft spare parts and VAT on non-resident services for airlines, were canceled by the end of the year.
Non-state media are exempted from taxes and mandatory payments from the wage bill until Oct. 1, 2020.
For individuals, a tax amnesty has been introduced until the end of the year. Upon payment of the principal amount of the tax, the penalty and penalty are debited.
To support entrepreneurs engaged in international road transport of goods, the fee for the initial registration of truck tractors has been canceled by the end of the year.
In terms of tax administration, the deadlines for granting residency certificates have been extended until the end of the year, and the legitimacy of scanned copies of documents issued during the state of emergency has been recognized.
The Comprehensive Plan, along with tax incentives, includes measures to expand lending, develop infrastructure, support domestic production, entrepreneurship and preserve employment. In September 2020, the second package of amendments will be introduced as a separate bill for the consideration of the deputies.
To support the manufacturing industry, it is envisaged to create an Industry Development Fund, conclude off-take contracts, and increase reimbursement of up to 80% of transport costs when exporting high value added products.
Processing enterprises will be credited through the Fund at a rate of no more than 3%.
To date, the total amount of concluded off-take contracts in the manufacturing industry is more than 19 billion tenge. Analysis is carried out on a regular basis to identify potential domestic producers.
The implementation of a number of projects in the manufacturing industry with export potential through lease financing is being considered. This is the construction of a high-tech foundry, a plant for the production of final drive axle gearboxes for trucks and a plant for the production of automobile tires.
The agro-industrial complex provides for the introduction of forward contracts for agricultural producers and the introduction of a financing mechanism on the principle "from field to counter". These measures are aimed at ensuring the constant purchase and sale of agricultural products.
The pilot project "from field to counter" this year is planned to be implemented in Zhambyl, Turkestan and Almaty regions. For this, all the necessary preparatory work is carried out.
In the construction industry, it is planned to launch a pilot project of concessional lending 5-10-20 and ensure the purchase of domestic building materials during the construction of the Employment Roadmap facilities.
A draft Roadmap for the digitalization of public services and measures of state support for promoting employment has been developed within the framework of the Enbek State Program. It is possible to apply through the web portal of the e-Government when registering as unemployed. The period for registering a job seeker as unemployed has been reduced from 2 weeks to 3 working days.
To support SMEs, the National Bank's program and the Business Roadmap-2025 are expanding activities and simplifying lending procedures.
In the current period, supporting microbusiness is an important issue. Addressing issues of access to loans and collateral is a factor in the development of SMEs, especially micro-businesses. Therefore, the state program Business Roadmap-2025 includes a new direction - microcrediting of small and micro businesses.
Funding will be available at a rate of no more than 6% through subsidies. Today the rates for such loans are high. The new direction will allow getting loans at a rate of 6%. Loans will be issued up to 5 million tenge to replenish working capital and up to 20 million tenge - for production needs.
Sources of financing - own funds of banks and microfinance organizations. This solves the issue of providing a pledge. The Damu Fund will guarantee up to 85% of the loan principal. This will cover a wide range of microbusiness representatives.
Consideration of micro and small business projects will be accelerated through simplified approval procedures.
In the areas of social protection, education and health care, measures are envisaged to simplify registration at employment centers, improve remote training methods and strengthen the national sanitary and epidemiological service.
All these measures are aimed at minimizing the negative consequences of external shocks. Also, the Comprehensive Plan will solve operational issues in the sectors of the economy, support employment and entrepreneurship.
Additional measures to support business
In order to launch a new cycle of business activity, measures are being taken to support domestic business. As you know, in the current situation, restrictive quarantine measures have had a direct impact on SMEs.
Therefore, tax incentives have been provided to support SMEs, lending is expanding and measures are being taken to further ease the business environment. The ministry is in constant contact with the business community and NCE Atameken. All incoming proposals from business representatives are analyzed and systematized by us.
Thus, on the basis of business proposals, additional measures were developed to support the business. They were adopted on June 18 of this year by the decision of the State Commission for Restoring Economic Growth.
Additional measures include procurement, Kazakhstani maintenance, leasing of agricultural machinery, opportunities for refinancing loans, promoting goods for export and simplifying procedures. In general, the measures are aimed at solving current business issues. Responsible state bodies and organizations have been identified for all measures, and deadlines have been set.
The measures are based on proposals from entrepreneurs from all regions of the country and take into account the most pressing and problematic issues of concern to domestic business.
New scenario developed for event of worsening socio-economic situation
In pursuance of the instructions of the Head of State given at the extended meeting of the Government on July 10, 2019, the Government, together with the National Bank and the Agency for Regulation and Development of the Financial Market, adopted a Joint Action Plan to support the economy and population in case of a worsening socio-economic situation.
The joint action plan includes activities with specific deadlines and forms of completion in four directions. These are support for employment and income of the population, urgent measures to support SMEs, active import substitution, and macroeconomic stability.
Strategic plan to determine main guidelines for country's new economic course
The new economic reality requires fundamental changes in economic policy to ensure high-quality and sustainable development of the country in the medium term.
In pursuance of the instructions of the Head of State, by Aug. 1, 2019, a new version of the Strategic Plan until 2025 will be formed, which will determine the main guidelines for the country's new economic course for the medium term.
The main task will be the formation of a new structure of the economy based on increasing its self-sufficiency, the effective development of import substitution, the formation of new ecosystems for the development of deep redistribution in the manufacturing industry, targeted investment attraction, as well as the active increase in the country's export potential.
In addition, active work will be launched to develop the agro-industrial complex in new conditions.
The measures taken to manage risks have been positively assessed by a number of leading international institutions. In general, systematic monitoring of external and internal factors will continue to take preventive measures in order to preserve social and economic stability in the country.