Prime Minister explains need to raise VAT rate in Kazakhstan
Kazakhstan plans to increase its value-added tax (VAT) rate from 12% to 16% starting in 2026, in what Prime Minister Olzhas Bektenov described as a necessary step to ensure sustainable economic growth, Kazinform News Agency correspondent reports.
Speaking at a government briefing on Tuesday, Bektenov acknowledged that any tax hike is an unpopular and painful measure, but stressed that it is vital for expanding the country’s development budget.
He noted that sustainable economic growth is only possible with advanced infrastructure development, which in turn requires substantial government investment.
According to Bektenov, the current share of the development budget in overall government spending remains critically low, limiting the state’s ability to keep up with economic needs.
“At present, our development budget is at a critically low level. It does not allow us to respond quickly enough to economic demands or expand infrastructure at the required speed. With the adoption of the new Tax Code from 2026, we expect additional budget revenues and an increase in the development budget share by around eight percentage points to reach 18%. This will enable us to secure sustainable economic growth,” the Prime Minister explained.
Earlier, Kazinform News Agency reported that in the first six months of 2025, Kazakhstan’s agriculture sector grew by 3.7%.
