Intends to Lower Personal Income Tax in Kazakhstan
🔥 In Kazakhstan's Tax Overhaul, the Standard Deduction Gets a Boost 🔥
Ready to lighten your tax load, Kazakhstan-style? Here's the lowdown on the proposed adjustments to individual income tax (IIT) deductions in Kazakhstan.
Currently, Kazakhstan offers a variety of tax deductions for its citizens:
- A standard deduction of 14 monthly calculation indicators (MCI), capped at 168 MCI per year (equivalent to 660,576 tenge in 2025).
- For larger families - 12 MCI (47,184 tenge) per parent, or 23 MCI (90,436 tenge) for a single parent.
- Additional deductions for education, medical expenses, and mortgages, not exceeding 118 MCI per year (463,976 tenge).
But things might be changing. There's talk of "optimizing" the system by eliminating other deductions, leaving only the one for voluntary pension contributions. In return, they're proposing to jack up the standard deduction to 30 MCI per month (117,960 tenge in 2025).
And if the State Revenue Committee gets its way, the maximum deduction amount would skyrocket from 168 to 360 MCI per year (1,415,520 tenge). This means for labor contract-abiding workers, the IIT calculation base might shrink, potentially resulting in larger post-tax paychecks.
Here's a peek at how it could pan out:
58,040 tenge, 170,196 tenge, 163,905 tenge. To make life easier, those who now employ preliminary deductions will no longer need to file tax returns, nor will they have to collect and store documents to prove their deductions are on the up-and-up.
The new standard will be applied retroactively, effective January 1, 2025, for all physical persons, individual entrepreneurs, and private practitioners. For ordinary citizens, no sweat. But accountants might need to recalculate and, if necessary, refund any overpaid IIT from their employees' salaries for all previous months.
Meanwhile, Prime Minister Olzhas Bektenov has suggested increasing Value-Added Tax (VAT) while cutting social tax and pension contributions for employers.
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💡 Did You Know?
Some search results hint at broader tax changes in Kazakhstan. Here's a sneak peek at some other proposed changes:
- Sector-specific corporate tax rates: banks and gambling ventures face a 25% tax, manufacturing companies a 10% tax, and agricultural producers a reduced 3%-6% tax rate.
- Withholding tax for non-residents: a 5% withholding tax on dividends for non-resident investors owning at least 25% of resident companies is proposed.
- Value-added tax (VAT): the standard VAT might increase from 12% to 16%, with a new 10% VAT rate for medical services.
- Exemptions and deductions: some exemptions, such as the 10% withholding tax exemption for dividends on shares held for over three years and exemptions on dividends and interest from securities traded on the Kazakhstan Stock Exchange, could be eliminated.
For the latest on IIT deductions, keep an eye on the latest version of the proposed tax code or official announcements from Kazakhstan's Ministry of National Economy or Ministry of Finance. And watch out for unexpected curveballs—after all, nothing's ever black and white in the world of taxes! 🕵️♂️
In the potential tax overhaul in Kazakhstan, the standard deduction could significantly increase, reaching 30 monthly calculation indicators (MCI) per month, which is equivalent to 1,179,600 tenge in 2025. This proposed adjustment to individual income tax (IIT) deductions could lead to larger post-tax paychecks for labor contract-abiding workers.
Furthermore, discussions are underway to optimize the tax system by eliminating some deductions, leaving only the one for voluntary pension contributions. If approved, the maximum deduction amount could rise from the current 168 to 360 MCI per year (1,415,520 tenge), potentially benefiting businesses and citizens alike in Kazakhstan's evolving financial landscape.
