Inflation in Kazakhstan to accelerate to 12% in 2026, GDP to drop after VAT hike - Economy MinistryInflation in Kazakhstan will accelerate to 12% from the current 8.9% and GDP will decline, Kazakhstan's First Deputy Minister of National Economy Azamat Amrin said.The average annual GDP growth, according to the republican budget for 2025-2027, is 5.4%, Amin said. According to his estimates, an "overall decline in GDP" is expected due to changes in economic activity, namely increase and differentiation of the tax rate.At the same time, he believes that this will be a short-term decline "within a year". Consumer price inflation is expected to be 12% in 2026, he added.As reported, Kazakhstan's GDP growth was 4.8% in 2024.The World Bank (WB) forecasts that Kazakhstan's GDP will grow by 4.7% in 2025 and by 3.5% in 2026.Annual inflation accelerated to 8.9% in January from 8.6% in December 2024.The country's National Bank aims to stabilise inflation at around 5% in the medium term. As reported, on February 20 a package of amendments to the draft Tax Code was submitted to the Majilis of Kazakhstan's parliament, which includes an increase in the VAT rate from 12% to 16%.The main amendments include an increase in the VAT rate from 12% to 16%, with a reduced rate of 10% for certain industries.The amendments also include a reduction in the threshold for mandatory VAT registration - from 20,000 MCI (78.6 million tenge) to 3,800 MCI (15 million tenge), a restriction on the application of a special tax regime of simplified declaration - it will be available only to the B2C (business-to-consumer) segment.Initially, it was planned to increase VAT to 16% in 2023 and to 20% in early 2025, while reducing the burden on the Wage Fund (WF), which caused concern in the Kazakh business community.On February 7, 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, as well as a zero rate and full VAT exemption, particularly for agricultural producers. Businesses currently operating in the retail sector, which are subject to income tax at a rate of 4%, will not be subject to VAT. (ICE ALMATY)

Fonte notizia: INTERFAX