Kazakhstan shapes a new philosophy of tax administration

From concept to implementation: a new philosophy of tax administration

In his Sept. 8 Address President Kassym-Jomart Tokayev set an ambitious goal: the State Revenue Committee must become the leader in digitalization among all government bodies.

According to Osipova, this is not about “cosmetic modernization,” but about building an intelligent tax system where artificial intelligence and digital services primarily work for the convenience of taxpayers.

“The philosophy of the new Tax Code is simple: the state not only demands, but also helps,” Elmira Osipova emphasized.

The Code introduces measures previously uncharacteristic for tax administration — online training and support for new taxpayers, mobile service groups for remote regions, pre-filled declarations prepared by the tax authorities themselves, as well as 24/7 hotlines and mobile applications.

Prevention before enforcement

Particular attention is given to Article 90 of the new Tax Code, which establishes the principle of prevention as a priority.

“Now an entrepreneur or citizen will first receive a reminder about payment or declaration deadlines, rather than a fine protocol,” the expert explained.

According to her, digital notifications and taxpayer support reduce the risk of errors and help citizens fulfill their obligations on time, forming a ‘state–partner’ model.

Tax literacy as a foundation of trust

Osipova notes that the effectiveness of the tax system depends not only on technology, but also on the level of tax literacy.

“Taxes are not only about top-down control — they are about the conscious participation of citizens and businesses in forming public goods,” she stressed.

According to her, taxation is a social contract: the state directs collected taxes toward economic and social development, while citizens and businesses conscientiously and timely meet their obligations.

“Improving tax literacy is not a secondary task, but a strategic priority — without it, it is impossible to build a sustainable and trustworthy tax system,” Elmira Osipova added.

VAT reform: a step toward a fair and mature economy

One of the key directions of reform will be the increase and differentiation of value-added tax (VAT) rates starting in 2026. Currently, the VAT rate in Kazakhstan stands at 12%, one of the lowest in the world.

“Raising and differentiating VAT rates is not just an attempt to ‘collect more revenue.’ It is a step toward updating the country’s economic model — toward a transparent, mature, and fair system where taxes work for development, not against it,” Elmira Osipova explained.

The reform provides for raising the base VAT rate to 16%, while introducing reduced rates of 5% and 10% for socially important sectors — including medicines, medical services, and domestic publications.

“Today, only about 4% of Kazakhstani enterprises actually pay VAT. Lowering the registration threshold to 10,000 MCI and introducing new rates will change business motivation: the costs of fragmentation will outweigh the benefits of avoiding taxation,” the expert noted.

A new social contract

Osipova emphasized that the VAT reform symbolizes a new social contract between the state, business, and citizens.

“Paying taxes means investing in the development of the country — in roads, schools, healthcare, and the future of our own children,” she said. “The VAT reform is a step toward an honest and mature economy, where taxes serve development, and transparency and responsibility become the new norm for everyone.”

Earlier, it was reported that Kazakhstan’s state budget revenues are projected to reach 19.2 trillion tenge in 2026, equivalent to 10.5% of GDP, according to Deputy Minister of National Economy Azamat Amrin.