Financiers break down public revenue and spending in Kazakhstan

According to the Association of Financiers of Kazakhstan (AFK), over the period from 2019 to 2023, the growth of the consolidated budget of Kazakhstan (state and local budgets plus transfers and spending of the National Fund) was lagging behind the increase in spending by 87 percentage points. This is why the government constantly increased the amount of its borrowing (by 1.7 times to $12.2 billion) and the size of transfers from the National Fund ($40.4 billion over the five years).

Sources of income for the budget

Over the past five years, there have been no significant changes in the consolidated budget of Kazakhstan. Taxes accounted for the largest part of state revenue (37%).

In 2023, Kazakhstani tax authorities collected $52.2 billion in taxes, a 10% increase over 2022 thanks to an increase in collecting of the value-added tax ($258 million) and customs fees ($315 million).

Despite these figures, the tax authorities managed to fulfill only 91% of the tax collection plan. The AFK believes that the decline in oil prices has mitigated the positive impact of factors such as the increase of tax rates and oil and the growth of the country’s economy by 5.1%.

The government failed to collect enough taxes in the sphere of corporate income ($2.4 billion), VAT for imports ($922 million), mineral extraction tax ($464.6 million) and export customs duties for crude oil (262 million).

On the other hand, the government reported a 3.2-fold increase in non-tax revenue compared to 2022. This increase was driven by dividend payouts on securities controlled by the government ($2.4 billion).

Changes in expenditures

Spending on the consolidated budget grew by 27% ($14 billion), reaching $63.5 billion. This figure surpasses revenue by 12% ($7.7 billion).

Spending primarily grew due to debt settlement and servicing (+2.8 billion), an increase in costs related to education (+2.8 billion), social support (+$1.7 billion) and utilities ($1.3 billion).

The share of debt settlement and servicing has grown from 10% to 16% over the past five years in the overall budget structure, while the share of social support dropped from 23% to 18%.

In 2024, according to the forecast of socio-economic development, a slight surplus of the consolidated budget may emerge. However, there are risks such as lower oil prices, delays with the Tengiz Expansion project, problems with oil exports via the CPC and the potential impact of various geopolitical factors. All this can worsen budget parameters, the AFK noted.