Budget revenues in Kazakhstan increase due to reduction of shadow economy

Budget revenues in Kazakhstan increase due to reduction of shadow economy

According to the results of 2019, the share of the unobserved economy in Kazakhstan decreased from 27 percent to 23 percent of state’s gross domestic product. This allowed an additional increase in budget revenues by 1.5 trillion tenge (US$3.7 billion). The next goal is to reduce the share of the shadow economy in GDP to 20 percent by 2025. Acting Finance Minister of Kazakhstan Berik Sholpankulov reported about measures taken to reduce the shadow economy at the government session.

“In order to achieve the set objectives, the government is implementing an Action Plan to counteract the shadow economy for 2019-2021. The main directions of the Plan are digitalization of tax and customs administration, development of cashless payments, countering the legalization of proceeds of crime and improvement of legislation. In accordance with the measures taken under the Plan, it was possible to achieve a reduction of the shadow economy to 23.62 percent of last year’s GDP,” Sholpankulov said.

Nearly 916 billion tenge (US$2.2 billion) of the 1.5 trillion of the additional increase in the state budget revenues, comes from the digital transformation of tax and customs administration.

“Since the beginning of this year, the mandatory use of online cash registers has begun. To date, the total number of users of cash registers is 728,000, of which 710,000, or 97.45 percent, switched to online cash registers. In addition, on the basis of existing information systems, a National Traceability System of Goods is being created. Since October of this year, electronic accompanying invoices for goods will be introduced in the information system. The system will allow tracking the entire chain of movement of goods to its retail chain. After the formation of the system is completed, the issuance of fictitious invoices will be suspended,” Sholpankulov said.

In addition, a database of third parties was created for tax administration purposes. Another effective tool is the treasury support of public procurement in the construction industry. One of the main areas of work for the Kazakh Finance Ministry is to reduce discrepancies in mirror customs statistics.

“Currently, electronic exchange of customs declarations between Kazakhstan and China is carried out online. This allowed reducing the discrepancy in Kazakh import from China from 60 percent in 2017 to 48 percent in 2019. According to the results of five months, the discrepancy decreased to 39 percent. The state budget received additional 236 billion tenge (US$584 million) of revenues last year,” Sholpankulov said.

According to Kazakh Finance Ministry, as a result of the implementation of the ‘Risk Management System’, the national budget received 34.9 billion tenge (US$86 million) since the beginning of the year. The tax administration of import from the Eurasian Economic Union member states was strengthened. In addition, the Export Control module was put into trial operation. As a result, the additional revenue of 122 billion tenge (US$301.9 million) from the value-added tax was received.

 

Photo: pikabu.ru