Kazakhstan's shadow trade

The tightening of the Astana government's fiscal policy to cover the budget deficit has led to an explosion of black transactions. Entrepreneurs believe that the fiscal limits need to be revised, which has not happened for over four years, and what could have been adjusted in 2020, today seems decidedly lacking in credibility.

Astana (AsiaNews) - Many small and medium-sized entrepreneurs in Kazakhstan have been increasingly taking refuge in black market trading in recent times, due to the government's tightening of tax policy to cover the budget deficit. Since 2020, a ‘barrier’ rule has been included in the Tax Code, which provides for a ceiling above which companies have to pay a surcharge of 12% on turnover, which corresponds to approximately 2,000 per year.

In recent times, more and more small and medium-sized businesses are exceeding this threshold, and in the country's main cities even small shops are reaching it, and it is becoming increasingly frequent to pay for purchases in cash without registering them, at most with bank transfers to individuals, with attempts by the authorities to control these transactions more and more strictly.

A shopkeeper in Almaty with the cover name Nurgul confesses to Azattyk that she has been working with opaque systems for seven years already, explaining that ‘exceeding the thresholds does not depend so much on earnings, but on the constant increase in prices’. All entrepreneurs believe that the tax limits need to be revised, what has not happened for more than four years, and what could have been adjusted in 2020, today is definitely not credible.

The Kazakh traders are also very dissatisfied with the banking policies, with excessive commissions and additional 3% tax charges on transactions. As of this year, the various moratoria on irregularities have been lifted, and there is a race among businesses to evade the new controls, although one of the leading experts of the Almaty Chamber of Entrepreneurs, Kanat Ešengeldiev, believes that ‘the controls are still rather limited for now, it is the traders who are still used to total arbitrariness’.

Therefore, further verification campaigns by the relevant bodies are awaited, with warnings from the revenue agency that still do not correspond to systematic actions, which will probably only be realised in 2025. This is why merchants remain tied to liquid payment systems or with ‘mobile’ transfers from one account to another, which the State Board of Revenue continually emphasises as a widespread form of illegality.

There are individuals who receive over 100 or more bank transfers during each quarter of business activity, to accounts not set up for the purpose and not subjected to adequate verification, in a sea of ‘shadow economy’ that is still very difficult to investigate and bring back to normal.

Photo: Flickr/AsianDevelopment Bank

• Kazakhstan
• Astana
• trade
• economy
• taxation