Wednesday, january 17, 2017 inside nation healthcare minister reports on new infrastructure development plan A2

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WEDNESDAY, JANUARY 17, 2017

ECONOMY

NEWS IN BRIEF

ECONOMY

Kazakhstan and EBRD 

to continue work 

on modernisation of economy

By Zhazira Dyussembekova

ASTANA – The Kazakh gov-

ernment and the European Bank 

for Reconstruction and Develop-

ment (EBRD) recently signed a 

new three-year accord extending 

cooperation within the Partnership 

Framework Arrangement (PFA) 

for Enhanced Cooperation for Pro-

motion of Sustainable Develop-

ment and Growth. The original ac-

cord was signed in May 2014 and 

expired at the end of 2017.

The accord includes cooperation 

on global competitiveness, green 

economy, privatisation, infrastruc-

ture and other priorities. The coop-

eration is meant to modernise and 

diversify the Kazakh economy.

A separate accord will be signed 

covering cooperation in attract-

ing investments, the development 

of  the  financial  and  small  busi-

ness sectors, the stimulation of 

entrepreneurship and sustainable 

regional development, states the 

press release from the EBRD of-

fice in Kazakhstan.

“In current circumstances, when 

the global competitiveness of 

countries depends on investments, 

technology development, and hu-

man capital, the cooperation and 

support  from  international  finan-

cial institutions is crucial for our 

country. In this regard, we put the 

highest value to expanding coop-

eration with the EBRD and look 

forward to a further fruitful part-

nership,” said Kazakh Minister of 

National Economy Timur Sulei-

menov.

The Partnership Framework 

Arrangement is expected to also 

spur cooperation within municipal 

infrastructure  and  identified  co-

operation priorities, including the 

development of a green economy 

and the renewable energy sector, 

the improvement of Kazakhstan’s 

global competitiveness, prepara-

tions for national company priva-

tisations, among others.

“Over the past three years our 

joint work within the Partnership 

Framework has helped boost 

investments and has driven for-

ward a number of significant re-

forms in the country. I would like 

to commend our Kazakh coun-

terparts for the effective work 

of the Coordination Council and 

for their financial contribution to 

various investment projects. We 

have jointly achieved tangible re-

sults in different areas including 

SME support, innovation, invest-

ment climate, regional develop-

ment and institutional reforms 

and municipal sector develop-

ment to name a few,” said EBRD 

Director for Kazakhstan Agris 

Preimanis.

New tax code provides simplified regime for 

SMEs, new principles in administration

By Zhazira Dyussembekova

ASTANA – Kazakhstan’s new 

Tax Code entered into force Jan. 

1. The updated code provides for 

the introduction of some changes 

in the existing tax legislation, in-

cluding  a  simplified  tax  regime 

for small and medium-sized busi-

nesses, the cancellation of some 

tax privileges and the introduction 

of new principles in tax adminis-

tration.

In describing the code previous-

ly, Kazakh Minister of National 

Economy Timur Suleimenov said 

that it aimed primarily at the de-

velopment of small and medium-

sized businesses. One way to 

support that is its new alternative 

tax  regime,  which  uses  a  fixed 

deduction (taking into account 

income and expenses) of 30 per-

cent. Business owners themselves 

will be able to choose which re-

gime is more profitable for them. 

Businesses that make a maxi-

mum income of 300 million tenge 

(US$903,000) and have a maxi-

mum of 50 employees can opt for 

this regime.

Relief is also offered to business 

in the form of fewer inspections: 

from 32 reasons for inspection, 

there are now just 14. The tax rate 

for individual entrepreneurs work-

ing under the patent was reduced 

from 2 to 1 percent.

Tax changes have been made 

in the agrarian sector, in geologi-

cal exploration and subsoil use, 

industry and investment and spe-

cial  economic  zones.  The  finan-

cial sector is expected to recover, 

and the burden on payrolls has 

been reduced, according to za-

kon.kz.

In order to solve this issue and in 

order to maintain the current load, 

the social tax rate was reduced 

from 11 percent to 9.5 percent.

Inefficient  benefits  and  pay-

ments have been cut. Auction 

fees have been cancelled, as have 

payments for the use of navigable 

waterways, since the state does 

not provide services and permits 

in these cases, according to Sulei-

menov.

Privileges have been cancelled 

for turnover from the services 

of slot machines, sales of lottery 

tickets, state postal payment signs 

and the import of postage stamps. 

Privileges that contradict World 

Trade Organisation (WTO) re-

quirements were cancelled as well. 

The WTO requires equal condi-

tions for taxation for domestically 

produced goods and imports. Rev-

enues from e-commerce are now 

exempt from corporate income tax 

and individual income tax.

New  principles  in  the  field  of 

tax administration have been in-

troduced in an effort to establish 

clear rules for interaction between 

state revenue bodies and taxpay-

ers. These are the principle of le-

gality, the principle of effective 

interaction and the principle of 

risk-based administration. Rights 

and responsibilities for conduct-

ing tax audits have been clarified 

and the risk management system 

has been radically revised. Tax 

administration, including incen-

tive and control measures, will 

be built on a foundation of a dif-

ferentiated approach to taxpayers. 

For low-risk taxpayers, there are 

no tax inspections, and the timing 

of reporting, the payment of debts, 

the possibility of participation in 

horizontal monitoring and other 

activities may be relaxed.

Amendments to the new Tax 

Code can be made no more than 

once a year.

Continued from Page A1

“Right now, our committee for 

regulation of natural monopolies 

and the protection of competi-

tion has legal levers: these are 

turn-over penalties and the with-

drawal of monopoly income. 

While this year we did not stir 

anything, we will closely moni-

tor the development of the situa-

tion,” he added.

The December inflation rate was 

0.7 percent compared to the previ-

ous month and 7.1 percent year-

on-year compared to 2016, ac-

cording to the Ministry of National 

Economy statistics committee.

“One of the important trends of 

the past year was the slowdown of 

inflationary processes. Throughout 

the  year,  inflation  was  within  the 

6-8 percent target corridor of the 

National Bank and, as a whole, 

showed a downward trend. As a 

result of November, the consumer 

price growth index was 7.3 per-

cent, which is lower compared to 

the end of last year – 8.5 percent,” 

said National Bank chair Daniyar 

Akishev.

Prices for confectionery rose 

10.7 percent in 2017 and horse-

meat  and  fresh  fish  prices  grew 

9.8 and 9.4 percent, respectively. 

The prices for sugar dropped 19.5 

percent  and  sunflower  oil  by  9.9 

percent.

Diesel fuel prices rose 31.8 per-

cent last year, gasoline (17.6 per-

cent), coal (17.4 percent) and liq-

uefied gas (8.6 percent). Prices for 

healthcare services increased 7.9 

percent, legal services (7 percent) 

and entertainment and culture pro-

grammes (6.9 percent).

Economy minister: 

inflation rate won’t 

exceed 7 percent 

this year

Government adopts 

bill to reduce 

transactions 

in foreign currency

Staff Report 

The Kazakh government has 

adopted a bill developed by the 

National Bank of Kazakhstan to 

reduce transactions in the coun-

try in foreign currency.

“The bill is designed to ex-

pand the coverage of statistical 

monitoring of foreign exchange 

transactions and reduce the use 

of foreign currency in Kazakh-

stan,” said bank chair Daniyar 

Akishev, presenting the bill at a 

government meeting.

One of the important changes 

and additions envisioned by the 

bill is strengthening currency 

control over transactions aimed 

against moving funds outside 

the country.

“In accordance with the in-

structions of the head of state, 

the bill defines a list of currency 

transactions that have signs of 

movement of funds outside the 

country. First is the provision 

of a financial loan by a resident 

to a non-resident, which does 

not provide for repayment by 

crediting funds in Kazakhstan. 

Second is the provision of a fi-

nancial loan by a non-resident 

to a resident, which does not 

provide for repayment by cred-

iting funds in Kazakhstan. Third 

is the provision by the resident 

of an interest-free financial loan 

to an unaffiliated non-resident 

for a period exceeding 720 days 

or operations for payment of 

export or import with a repa-

triation period of more than 720 

days,” said Akishev.

“Such transactions will be 

carried out by banks only upon 

submission by the resident of 

permission to transfer infor-

mation to the financial control 

authorities and the draft law 

provides for the right to trans-

fer information on currency 

transactions containing bank 

secrecy to the state committee,” 

he added.

The proposal also introduces 

a number of changes aimed at 

state revenue bodies’ access to 

more complete information on 

currency transactions, improv-

ing the effectiveness of curren-

cy control in the legislation. At 

the same time, the draft law in-

tends to preserve the principles 

of the liberal currency regime.

The draft legislative amend-

ments were adopted at the gov-

ernment meeting and will be 

submitted for consideration to 

the Mazhilis (lower chamber 

of the Kazakh Parliament). The 

planned date for putting it into 

effect as the law is July 1, 2019.

Real estate prices to hold 

steady, experts say

Staff Report

ASTANA – Representatives of 

the United Association of Real-

tors of Kazakhstan said prices for 

real estate in the country will not 

show significant changes in 2018, 

according to inform.kz.

“There were no seasonal price 

changes for several years. The 

price changes depend on the eco-

nomic factors of demand. When 

considering the trends in these 

factors, real estate prices will not 

show any special changes in 2018. 

In Almaty, prices will remain at 

the same level or show a slight 

increase due to buyers who previ-

ously delayed the decision to pur-

chase real estate, and also these 

factors will support continued 

positive dynamics in the number 

of transactions. The beginning of 

the functioning of the Astana Inter-

national Financial Centre will also 

set a positive trend in the property 

market of Astana,” said President 

of the United Association of Real-

tors of Kazakhstan Yelena Griva.

According to her, prices will re-

main on the same level due to the 

commissioning of new state pro-

grammes and the further develop-

ment of existing ones.

In 2017, Kazakh residents have 

observed relative stability in the 

market for new housing and a de-

cline in the secondary market. In 

new buildings in Astana, the price 

was stable at a level of 318,000 

tenge (US$970) per square metre. 

In Almaty, prices for new housing 

have  fluctuated  in  the  corridor  of 

430,000-450,000 tenge (US$1,310-

1,370) per square metre.

Prices for secondary housing 

in 2017 in Almaty and Astana fell 

5-8 percent on average, while in 

some regions of the country the 

price declined 10-11 percent. Vice 

President of the United Associa-

tion of Realtors Nina Lukyanenko 

said that in 2018 the housing mar-

ket will be stimulated by migration 

flows (of people moving to cities), 

financial  literacy  and  financial  se-

curity of families and other eco-

nomic factors.

“The number of transactions in 

Kazakhstan for the period from Jan-

uary to November 2017 compared 

to the same period in 2016 rose 

28.6 percent. Is it due to increased 

solvency among the population? I 

don’t think so. The first reason for 

such growth in deals is calmness in 

the hearts of those who planned to 

improve their living conditions. For 

this period of time, many watched 

the exchange rates and did not hurry 

to invest in apartments and houses, 

not fully understanding what will 

happen to the cost of different cur-

rencies,” said Lukyanenko about 

the trends of 2017.

In 2018, in her opinion, demand 

will remain at a high level, but it is 

much more important for this de-

mand to be solvent. Only if demand 

is solvent will there be further posi-

tive movement. Small apartments 

purchased for personal use will be in 

demand.

Kazakh Minister of Energy Kanat 

Bozumbayev believes the country 

needs  a  fourth  oil  refinery,  khabar.

kz reports. According to Bozum-

bayev, a team of specialists has been 

studying this question. Next year, 

it is planned to prepare a feasibil-

ity study for a new refinery. As the 

minister noted, from 2019 it will be 

necessary to attract an investor to fi-

nance the project and start construc-

tion. “Kazakhstan needs a fourth oil 

refinery,  in  my  opinion.  We  raise 

this question, because the construc-

tion of the plant is not a matter of 

one year. Demand for fuels and lu-

bricants is growing. According to 

our forecasts, there will be a need to 

increase imports of petroleum prod-

ucts by 2022. By this time, the fourth 

plant should have already been built. 

The capacity of the existing three 

will not be enough to meet the grow-

ing demand,” Bozumbayev said.

The portfolio of Kazakhstan’s 

second-tier banks exceeded 5 tril-

lion tenge (US$15.05 billion), show-

ing growth of more than 30 percent 

over the past three years, khabar.kz 

reports. According to experts, the 

traditional surge of activity is ex-

plained by the New Year’s holidays, 

among other factors. The consumer 

lending market has revived, accord-

ing to First Credit Bureau (FCB) 

specialists, based on their research 

among financial organisations. The 

credit activity index of the popula-

tion, calculated by the FCB, reached 

30 points last year. This is a record 

indicator over the last few years. 

“This activity is primarily due to the 

fact that banks are more willing to 

lend. And not only banks: there are 

companies that are engaged in lend-

ing  or  microfinance  organisations. 

That is, the consumer credit market 

became active,” Business Develop-

ment Director of FCB Assem Nur-

galiyeva said.

In 2017, national spending on 

the social sphere increased 12 per-

cent and exceeded 4 trillion tenge 

(US$12.04 billion), increasing ben-

efits  and  pensions,  24.kz  reports. 

Kazakh President Nursultan Naz-

arbayev paid particular attention to 

this sector in his annual address to 

the nation on Jan. 10. Pensions now 

depend on work records. Since Jan. 

1, so called solidary pensions in 

Kazakhstan have increased 8 per-

cent. In July, depending on employ-

ment, the basic pension will almost 

double. “Starting from July 1, the 

average pension size, taking into 

account the basic pension, will be 

about 82,000 tenge (US$246.82). 

The total amount of funds provided 

for pension provision of citizens 

this year will be 1.9 trillion tenge 

(US$5.719 billion),” Press Secre-

tary of Kazakh Minister of Labour 

and Social Protection Nurlybek 

Zhenisbek said.

In 2017, the average monthly 

salary of Kazakhstan citizens in-

creased 4.4 percent, said Kazakh 

Minister of National Economy 

Timur Suleimenov. “In January 

to November 2017, the average 

monthly wage in nominal terms 

increased to 146,700 tenge 

(US$444),” the minister said at a 

Jan. 11 government meeting. Ac-

cording to the minister, steady 

growth of the economy was ac-

companied by an improvement 

in social indicators. He noted that 

one of the main priorities is the 

creation of new jobs. “Over nine 

months, the number of employ-

ees increased by 53,100 people 

and reached 6.4 million people 

as of Oct. 1 last year. This made 

it possible to keep unemployment 

at the low level of 5 percent. Ap-

proximately 34,000 self-employed 

persons transferred to the category 

of paid workers,” the minister said.

The Kazakh Council on Interna-

tional Relations predicts growth for 

Central Asian economies this year, 

inform.kz reports. “In our opinion, 

this year will be more positive in 

terms of economic development. 

The countries are expected to move 

to a positive dynamic of economic 

growth,” said Chairman of the Ka-

zakh Council on International Re-

lations Erlan Karin, presenting an 

analytical review of the region’s 10 

most important events. As he noted, 

according to various expert agen-

cies, including the World Bank, 

Central Asia’s economic growth 

will average 2.7 percent this year.

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