Kazakhstan raises tax for luxury possessions

The Ministry of National Economy of Kazakhstan has revealed who is going to pay the so-called luxury tax. According to Vice Minister Azamat Amrin, owners of cars worth more than $111,560 and those who own more than a dozen apartments will pay an increased tax.

Currently, the ministry is working on a new tax code, which is expected to introduce an increased tax for those who own luxury goods. As the official noted, the ministry is going to revise the current taxes rather than introduce a completely new tax.

For example, it is proposed to introduce a progressive scale of taxation for property tax. The higher the cost of a property, the higher the rate of a tax: from 0.01 to 1.5%. In addition, Kazakhstanis who own at least a dozen apartments will be obliged to pay an increased tax.

«We assume that for those citizens who own a dozen or even more apartments, the property tax will be calculated in aggregate. Therefore, it is going to be much higher. It will be increased taxation,» Amrin highlighted.

How much will luxury car owners pay?

Owners of expensive cars are also waiting for changes. The Ministry of National Economy plans to set a threshold of $111,560. If the cost of a car is higher than that, the tax for such a vehicle will be increased.

«If the market value of a car exceeds this threshold, then additional taxation will be applied through excises,» the vice minister noted.

How much do Kazakhstanis pay for private jets and yachts?

The government is also going to revise taxation for private jets and yachts. According to Amrin, there were cases when owners of such luxury possessions paid just about $30 in taxes. This doesn’t match the real value of the property.

«We are going to fix the situation. I mean, the transport tax on yachts and aircraft will be increased,» Amrin said.

Increased tax rates will also be applied to expensive types of alcohol and tobacco products. Currently, a tax for alcohol worth $13,380 is just $1.59 in Kazakhstan.

The rich will pay more

President Kassym-Jomart Tokayev came up with the idea of a tax on luxury possessions during his national address on September 1, 2022. The reform is expected to not affect the middle class.

In April 2023, Minister of Finance Yerulan Zhamaubayev failed to give a clear definition of who might be considered rich in Kazakhstan but didn’t rule out that the concept would appear in the new tax code. Many MPs kursiv.media talked with said that the country doesn’t need such a tax. However, they suggest the introduction of a tax on property of “unknown origin.”