Kazakhstan macro: Tax reform—January budget execution statistics signal caution

KAZAKHSTAN - Report 24 Feb 2026 by Evgeny Gavrilenkov

The January budget execution statistics published last week sent mixed signals, suggesting that the outcome of tax reforms orchestrated by the Kazakh government remains muted. This doesn’t mean that the reform will be unsuccessful, but it could fall short of expectations. The key element of the tax reform is associated with the VAT, and it is not only about slightly higher rates, but also about how the tax is going to be paid. Until this year, businesses with an annual turnover up to a certain threshold were exempt from paying the VAT. Hence, it was not unusual to see large companies split their business into smaller entities. The new rule cuts this threshold significantly, and the government targeted this year’s VAT in the republican budget at more than 60% above last year’s level. January budget execution statistics look reasonable, but tax collection appeared uneven by sector.

Decelerating household credit growth, which could limit household consumption growth and the demand for imports, the need to address oil overproduction issues, and an overly strong tenge, which suppresses taxes associated with the exchange rate, are among the risks that could negatively affect budget revenues over the rest of the year.

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