By Nikolay Radostovets, Executive Director of the Republican Association of Mining and Metallurgical Enterprises
During the inaugural session of the Parliament’s VIII convocation, President Kassym-Jomart Tokayev emphasised that establishing an open and self-reliant market economy is the foremost priority.
He stressed that following the steps to transform the political system, it is time to focus on specific economic issues. There is no time left for slacking off. The next five years will be decisive for Kazakhstan.
He named the formation of a fair, stable and transparent tax system as the first among the key economic tasks. The new model of tax policy should ensure the optimal distribution of national wealth, a high level of economic activity and targeted support for priority sectors of the economy. The tax code and tax policy should be clear and stable.
For the mining and metallurgical complex, where the implementation of projects requires long implementation periods and the investment of millions of dollars, and investors seek to minimize their risks, a stable taxation system is extremely important, especially when building long-term investment projects.
We fully support the initiatives of the Head of State aimed at ensuring that the demand from large enterprises in taxation is higher, as has been successfully practised in the world for a long time.
At the same time, considering that companies in the industry operate in foreign markets in a highly competitive environment, I would like to draw attention to the need to abandon non-tax deductions, to introduce a ban on all payments not provided for by the Tax Code. As practice shows, they have a significant financial burden on the industry enterprises. The collection of taxes should be as simple as possible, transparent, and understandable to the investor.
For example, we propose to switch to using the net profit before all taxes as a basis for calculating the tax burden ratio (TLC), as a more economically justified method used in World practice. We are confident that the adoption of the updated Rules for the calculation of CIT will also be useful considering the development of a new Tax Code since it will allow taking into account the real burden on representatives of a particular sector of the economy.
We believe that the Kazakh mining and metallurgical complex taxation system should comply with the best world practice and provide not only the necessary revenues to the state budget but also the possibility of further investment in the development of the mining and metallurgical complex. We should not have non-standard taxes, which are not used in world practice. This is a key issue for the future development of the Mining and Metals Industry.
In general, taxation should be aimed at stimulating the attraction of investments, increasing the competitiveness of mining enterprises, and developing high redistribution, which will lead the country to economic growth.
