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The head of the Ministry of Economy explained why businesses should not worry about the VAT increase
Minister of National Economy Alibek Kuantyrov, in an interview with journalists in the Mazhilis, explained why businesses have no reason to worry about the VAT increase, Kazpravda.kz correspondent reports.
Journalists asked the minister if he was afraid that business would not be able to withstand the VAT increase.
“We are not afraid. Because we analyzed it as a whole. Look, when VAT was reduced from 20 percent to 12 percent, the shadow economy did not decline. In OECD countries, VAT is 20 percent, the shadow economy is approximately the size of ours. In Russia, VAT was increased from 18 to 20 percent, but their inflation, on the contrary, decreased. That is, it brought a good effect. And they protected their agriculture and are now actively developing,” he explained.
Journalists also asked whether the VAT increase would lead to higher prices.
“Absolutely not. I have already said that there are not many VAT payers. According to our calculations, yes, there will be a one-time effect within 1 percent of inflation, this will be a one-time effect in 2025. At the same time, in general, inflation by 2025 is expected to be within 5-6 percent, taking into account other issues, including tariff policy and so on. Therefore, the economy will smoothly go through this, we are not raising VAT twice, only by 4 percent,” Kuantyrov is sure.
Photo: kazpravda.kz