2008年-世界发展银行全球_Republic_of_Kazakhstan_Tax_Strategy_Paper___Volume_1_A_Strategic_Plan_for_Increasing_the_Neutrality_of_the_Tax_System_in_Non-Extractive_Sectors_134页_8mb

Summary of the Republic of Kazakhstan Tax Strategy Paper (Volume I)

Core Content

This document outlines a strategic plan for increasing the neutrality of the tax system in non-extractive sectors of Kazakhstan. The focus is on labor, corporate income, and consumption taxes, with the goal of simplifying the tax system, reducing administrative burdens, and enhancing tax compliance and fairness. The paper also emphasizes the importance of aligning tax policies with international standards and improving transparency to reduce corruption.

Main Views and Key Information

1. Taxation of Labor

• Personal Income Tax (PIT): Currently has a complex structure with varying rates and exemptions. It is used to tax individuals' income and is subject to withholding at the source.
• Social Tax (ST): Applied to employers, with different criteria for agriculture and some services. It is a regressive tax, with higher rates for lower-income workers.
• Combined Tax Burden on Labor: The effective tax rate on labor is high, and the system is inefficient due to multiple tax bases and rates. The paper recommends a flattening of rates and alignment of structures to make the system more neutral and fair.
• Simplification Recommendations:
  • Merge PIT and ST into a single tax with a flat rate (e.g., 20%).
  • Use a unified threshold for all workers.
  • Allow deductions based on family size.
  • Eliminate the current differential treatment of agricultural and service sector workers.

2. Corporate Income Taxes (CIT)

• Current Structure: The CIT system has several simplified regimes and exemptions, which have led to tax base erosion and inefficiency.
• Assessment:
  • Marginal Effective Tax Rates (METRs) are high, especially for small and medium enterprises (SMEs).
  • Investment Tax Preferences (ITPs) and other incentives have been used to attract investment, but they are often discretionary and non-transparent.
• Recommendations:
  • Broaden the tax base by phasing out special regimes and exemptions.
  • Reduce the CIT rate to 20–25% to align with neighboring countries and the EU.
  • Replace ITPs with a general investment tax credit.
  • Extend the period for loss carry-over to 10 years or more.
  • Index depreciation allowances to inflation to reduce the upward pressure on the CIT burden.
  • Align depreciation schedules with economic depreciation to avoid penalizing manufacturing and favoring construction.
  • Allow refunds or credits for excessive advance payments to protect working capital.
  • Gradually phase out the 80% discount for agricultural enterprises, as it is inefficient and non-transparent.

3. Value Added Tax (VAT)

• Current VAT Structure: The standard VAT rate is high, and the tax base is narrow due to many exemptions.
• Performance: VAT revenue has grown, but productivity is low compared to EU countries.
• Recommendations:
  • Eliminate most exemptions (e.g., for farmers, lawyers, infrastructure projects, etc.).
  • Maintain a single VAT rate (introducing multiple rates is unnecessary and does not help the poor).
  • Introduce a deferred payment scheme for capital goods imports.
  • Improve the refund mechanism for exporters.
  • Review the VAT exemption threshold to ensure it is not too high.

4. Excise Duties

• Current Excise Structure: Includes taxes on tobacco, alcohol, and road transport, with some environmental levies.
• Recommendations:
  • Simplify the rate structure of excise duties.
  • Increase rates to reflect the social costs of smoking, drinking, and pollution.
  • Consider a separate assessment of real estate and land taxation.

5. Strategic Direction

• The paper argues that tax neutrality is crucial for competitiveness and economic efficiency.
• It highlights the negative impact of special regimes and exemptions on tax base integrity and administrative efficiency.
• The "oil curse" explanation is given for the proliferation of special tax regimes, where non-oil sectors are subsidized to divert attention from oil revenues.
• The tax system should be fair to all taxpayers, regardless of industry or size, to promote efficiency and reduce corruption.
• The medium-term tax reform package (2007–2010) is not ambitious enough and needs to be enhanced to ensure neutrality and fairness.

Key Policy Messages

• Simplification of the tax system is essential to improve administration, reduce corruption, and enhance competitiveness.
• Flattening tax rates and aligning structures will increase neutrality and make the system more efficient.
• Broadening the tax base for corporate and labor taxes, while reducing rates, will improve the tax system’s fairness and sustainability.
• Eliminating exemptions and special regimes is necessary to restore the integrity of the tax base.
• Indexing depreciation allowances and replacing ITPs with a general tax credit will help reduce the burden on businesses and improve transparency.

Strategic Recommendations

• Labor Taxes:

  • Consolidate PIT and ST into a single tax with a flat rate.
  • Apply the same criteria for all workers.
  • Introduce a generous zero band and family-based allowances.

• Corporate Taxes:

  • Broaden the CIT base by eliminating special regimes.
  • Lower the CIT rate to 20–25%.
  • Replace ITPs with a general investment tax credit.
  • Extend loss carry-over periods.
  • Index depreciation allowances to inflation.
  • Align depreciation schedules with economic depreciation.

• VAT:

  • Eliminate most exemptions to broaden the base.
  • Keep a single VAT rate.
  • Introduce a deferred payment scheme for capital goods imports.
  • Improve the refund mechanism for exporters.
  • Review the VAT exemption threshold.

• Excises:

  • Simplify the rate structure.
  • Increase rates to reflect social costs.
  • Consider a separate assessment of real estate and land taxation.

• General:

  • Address the "oil curse" by ensuring fair treatment of all taxpayers.
  • Enhance transparency and reduce discretion in tax administration.
  • Align tax policies with international standards to improve efficiency and competitiveness.

Conclusion

The tax system in Kazakhstan, particularly in non-extractive sectors, is currently characterized by complexity, inefficiency, and inequality. To improve the system, the government should simplify, flatten, and align tax rates and structures. This would lead to a more neutral, transparent, and efficient tax system, which is essential for long-term economic growth and competitiveness.