Kazakhstan Approves New Tax Code: VAT Set at 16%, Excise Hikes for Tobacco & HTPs
Majilis Passes Reforms Aimed at Simplification and Differentiated Rates
Deputies in Kazakhstan’s Majilis (lower house of parliament) have approved a new Tax Code in its second reading, introducing significant changes aimed at simplifying the system and adjusting tax rates across various sectors. The reforms include setting the standard Value Added Tax (VAT) rate and outlining phased increases for excise duties on alcohol, tobacco, and heated tobacco products (HTPs).
A key change sets the standard VAT rate at 16%, reduced from the government’s initial proposal of 20%. The code also raises the mandatory VAT registration threshold and introduces reduced VAT rates for medicines and medical services (5% in 2026, 10% in 2027). Exemptions from VAT will apply to socially significant food items, domestically published books, and certain medical services.
The new code mandates a phased increase in excise taxes for alcohol, traditional tobacco products, and importantly, heated tobacco products. Additionally, a new excise tax will be introduced for energy drinks. While specific rates and timelines for the excise hikes were not detailed in this announcement, the inclusion confirms increased tax pressure on these categories.
Other reforms include reduced corporate income tax rates for social sector organizations, increased tax deductions for individuals with disabilities, increased land use fees for inefficiently used agricultural land, and revised fees for subsoil use. Overall, the government aims to reduce tax reporting requirements by 30% and the number of taxes by 20%, optimize benefits, and stimulate investment while increasing taxes on luxury goods.
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