4% VAT increase to 16% 2026; new 10% reduced rate
Cut in VAT registration threshold
Kazakhstan has enacted on 18 July amendments to the Tax Code which include the standard VAT rate rising from 12% to 16% from 1 January 2026.
Various other VAT amendments in the Tax Code would apply from 1 January 2026.
The Kazakh changes are:
- VAT standard rate rise from 12% to 16%;
- New 10% reduced rate for essentials;
- Medical and medicine supplies would go to 5%, rising to 10% in 2027;
- Exemption for free medical care and social health insurance;
- Bank fees would be taxable for the first time, but other financial services would remain exempt; and
- Reduction in the VAT registration threshold from 78.6 million to 15 million sales per annum
Prime Minister Bektenov said in February: “The main tax burden falls on the wage fund and, therefore, on the cost of goods. Even before the product hits the shelf, entrepreneurs are forced to pay most of the taxes. By increasing the VAT rate, we can reduce the burden on the wage fund,” Bektenov explained. If implemented, these reforms could generate an estimated 5-7 trillion tenge in additional budget revenue, providing a significant boost to Kazakhstan’s public finances.
Initial approval and calls for further discussion
President Kassym-Jomart Tokayev has expressed support for the proposed VAT reforms but emphasized the importance of engaging in further discussions to ensure comprehensive understanding and alignment. His stance underscores the government’s commitment to balancing fiscal goals with the concerns of businesses and citizens.
