Kazakhstan plans to introduce a royalty-based taxation system in the draft of its new Tax Code, replacing the current mineral extraction tax (MET), according to Kanat Sharlapaev, minister of industry and construction. The proposal was outlined during a recent government meeting.
The shift to royalties is a recommendation from the World Bank, aimed at attracting more investment to Kazakhstan’s mining industry. Kazakhstan still uses MET, although the most common international practice is to calculate taxes based on the value of extracted resources or a company’s revenue.
«The shift to a royalty-based system, calculated on the sale price of minerals, will increase transparency and align with international mining industry standards. This change is expected to create a more investor-friendly regulatory environment in Kazakhstan,» Sharlapaev explained.
He also highlighted that tax rates would be lower for minerals processed domestically than for those exported in raw form.
«I propose that the ministries of economy and finance include royalty rates for subsoil users who receive mining licenses starting Jan. 1, 2026, in the draft of the new Tax Code,» Sharlapaev added.
Currently, MET is a mandatory payment levied on subsoil users for the right to extract minerals. The tax rate varies depending on the type of resource — such as hydrocarbons, metals or coal — as well as production volume and global market prices.
