Social security contributions to remain unchanged with 16% VAT rate - Deputy PM of KazakhstanThe burden on the Payroll Fund (PF) can be reduced only by increasing the VAT rate to 20% instead of the 16% currently being discussed, the press service of the Prime Minister reported.The answer was given during a meeting between the Minister of National Economy Serik Zhumangarin and businesses in Almaty."(…) the previously proposed reform to abolish the payment of social tax and mandatory employer's pension contributions by entrepreneurs could take place provided that the VAT rate is raised to 20%. The state would then have revenue to cover social contributions instead of the employer. However, with the current proposed VAT rate of 16%, social security contributions are proposed to remain unchanged," the government said in a statement.During the meeting, entrepreneurs raised issues related to lowering the threshold for VAT registration to 15 million tenge and narrowing the range of activities in the special B2C regime."The thresholds set as part of the reform for the registration of taxpayers may become an obstacle to the further operation of small businesses and lead to entrepreneurs being forced to split up their companies or hide part of their activities in order to avoid taxation," the statement said.According to Deputy Minister of National Economy Azamat Amrin, the state loses about 800 billion tenge a year in income tax from business splits because of the high threshold for VAT registration.In Kazakhstan, an increase in the VAT rate from the current 12% is being discussed. The initial plan was to raise VAT to 16% in 2023 and to 20% in early 2025, while reducing the burden on payrolls, which caused concern in the Kazakh business community.On 7 February, Kazakh President Kassym-Jomart Tokayev suggested that the VAT rate be differentiated, noting that the 20% rate proposed by the government was "too high".The government later proposed a basic VAT rate of 16%, a preferential rate of 10% for a number of industries, and a zero rate and total exemption from VAT, particularly for agricultural producers. The retail sector, which is currently subject to income tax at a rate of 4%, will not be subject to VAT.The draft tax code is expected to be submitted to Parliament by February 20, 2025. (ICE ALMATY)

Fonte notizia: INTERFAX