VAT and profit to be removed from in-country value of goods in Kazakhstan - Ministry of TradeThe Ministry of Trade and Integration of Kazakhstan excludes formal indicators, namely value added tax (VAT) and profit, when determining the share of domestic content in goods, the department's press service reported.It is noted that the changes affected the Rules for determining the country of origin of goods, the status of EAEU goods or foreign goods, issuing a certificate of origin of goods and canceling its validity, establishing certificate forms for determining the country of origin of goods.“Before the changes were made, when calculating the share of in-country value (ICV), the cost of finished products was taken into account at the ex-factory price, which included, e.g, administrative expenses not related to production, as well as VAT and profit. Thus, the ICV was overestimated, there were no incentives to localization, transition to the production of raw materials, components, or increase in the number of technological operations,” the Ministry of Trade explained.The department pointed out that in the certificates of origin of goods ST-KZ for individual goods, the ICV is 15-20%. “In fact, without VAT and profit, the real ICV in these goods does not exceed 3-5% and includes simple operations in the form of sorting and packaging without actual production,” the Ministry of Trade states.The changes come into force in six months; during this period, domestic manufacturers need to make appropriate amendments in the methods for calculating the cost of finished products, the department emphasized.President of Kazakhstan Kassym-Jomart Tokayev, in his message dated September 1, 2023, instructed government agencies, together with large industrial enterprises, to ensure the full production cycle in the country.“It is important to make maximum use of our raw materials, our personnel and goods, in other words, everything that is called in-country value. Through a new industrial policy, we will have to move to a qualitatively different model of development. The state, together with large enterprises, must close the production cycle in the country,” Tokayev said.On September 12, 2023, at a meeting with business representatives, Tokayev again noted that the real share of local content in the production of goods is still insufficient, while formal indicators in the form of including taxes and other items not related to production costs should be removed from the calculation of the ICV.The ICV indicator is important for supporting domestic producers of goods, works and services, and is taken into account when holding tenders, where Kazakh producers have the right to conditional discounts, i.e. an advantage. (ICE ALMATY)

Fonte notizia: INTERFAX