Economists warn of tough reforms looming for Kazakhstan

The first meeting of the Expert Council under the Ministry of Economy of Kazakhstan was held in Astana, with many experts advocating for urgent reforms to the country’s fiscal system. According to economist Rasul Rysmambetov, while these reforms are necessary, they won’t be popular.

The meeting, chaired by Economy Minister Serik Zhumangarin, was attended by more than 20 experts, including the heads of major financial, investment, analytical and consulting organizations, as well as Finance Minister Madi Takiyev.

Most of the meeting participants supported the proposed changes to a new tax code, which must be adopted by July 2025. For instance, the experts endorsed:

• Removing some of the existing tax benefits;
• Increasing corporate income tax for banks and financial organizations;
• Rescheduling the deadline for gains on public securities to become taxable from 2030 to 2026;
• Revising the taxation of the gambling industry.

Once introduced, these measures are expected to boost budget revenue by more than $1.8 billion.

However, experts stated that these measures alone are insufficient to resolve the budget deficit issue. They also noted that the burden on Kazakhstan’s financial system is increasing every year due to rising social expenditures, while less than 10% of these funds are allocated to the development of the real economic sector. The only viable solution to this equation is to reshape Kazakhstan’s entire fiscal system.

«This year [2025] is going to be tough for Kazakhstan. We must make difficult decisions that were postponed in previous years. First of all, we are talking about aligning prices with market conditions, as this is a key requirement for the government to remain capable of meeting its social obligations. Unfortunately, we must embrace very unpopular reforms to improve the situation with taxes and overall tax administration. We also have to revise tax rates. We are doing all of this not just to preserve the National Fund but to keep our economy market-oriented. The new tax code we discussed today, will soon be available for public consideration. I urge everyone to share their opinions on the document,» said Rasul Rysmambetov, chair of NAC Analytica.