Finance Minister Madi Takiyev reported on plans to improve tax and customs administration at the Government session chaired by Prime Minister Olzhas Bektenov.

Additional taxes and customs payments for 4 trillion tenge were received by the republican budget due to measures of administration and their digitalisation for the last 5 years. Of these, 23% falls on 2023. In the current year in the revenue plan for administration is envisaged 1.6 trillion tenge, which is 173% more than the previous year's level. 

A number of measures are envisaged to achieve the ambitious task. Thus, as part of the "regulation from scratch", the Risk Management System (RMS) criteria for tax audits have been revised. They are now carried out using a spot selection method. According to the Minister, the results are encouraging: with a 16 per cent reduction in the number of tax audits compared to 2022, tax collection has doubled. 

"For the first half of 2024, 760 high-risk business entities have been selected for audits. The issue of increasing the tax potential of large taxpayers, oil sector enterprises and MMCs is also being actively worked on. The implementation of the horizontal monitoring pilot, which will be one of the novelties of the new Tax Code, has great potential for their effective administration. The project is promising due to the possibility of building trusting relations between the state and business. Fiscal authorities have access to financial statements and historical data of the company, and the business in turn receives expert advice. Since the launch of the pilot, the budget has been replenished by 102 billion tenge," Takiyev said.

The Ministry of Finance is actively working on preventive mechanisms, adhering to the principle that any violation is better to initially prevent. To this end, the biometric identification function was introduced into the information system of electronic invoices. This will make it possible to mitigate the risks of registration of companies under false names, as well as the issuance of fictitious invoices.

As part of the implementation of the instruction of the Head of State in March of this year, Kazakhstan revised the procedures for VAT refunds. Taking into account the change of approaches in tax analysis and working out of violations, the share of confirmation to refund will increase. An analytical system is also being developed, which will ensure the efficiency of this procedure.

"This is a significant support for domestic commodity producers. I note that over the past two months we have returned to exporters from the budget about half of the total amount of VAT arrears. This work will be continued," the minister said.

Risk profiles have been improved in customs administration, which significantly reduced the need for physical inspections of goods. A pilot project on paperless transit has been launched, which also reduces the number of inspections. In case of successful testing, this experience is planned to be transferred further. 

Modernisation and introduction of modern solutions at 9 border crossing points is ongoing. The throughput capacity will increase 6 times, while the time of cargo passage will be halved, and corruption risks will be levelled. According to the head of the Ministry of Finance, all works will be completed by the end of this year. In general, the measures taken in this direction will significantly strengthen the transport and logistics potential of the country.

The electronic queuing system is now implemented at all external border crossing points and seven internal border crossing points (with EAEU member states). To date, it is the only one in Central Asia. The system ensures transparency and speed of the transport process, minimising congestion at borders. It is these factors that affect the cost of freight and lead to a reduction in carriers' costs, which has a positive impact on the final cost of goods.

Also last year, a pilot for issuing foreign permit forms in electronic format was launched at the Chinese direction. As a result, the throughput capacity of the points increased by 61%. The share of domestic carriers in the market was also increased and the corruption factor was eliminated. As part of the agreement with the Ministry of Transport, it was decided to extend the pilot period for another year. All these measures are expected to increase customs payments by 31% this year compared to 2023.

Madi Takiyev also informed about the work carried out by the Ministry of Finance on the digital transformation of tax and customs administration. It was stressed that the main task is to create favourable conditions for taxpayers, simplifying the whole process of fulfilling tax obligations to the state.

"On the instructions of the Head of State, work has begun on an independent IT audit of all information systems of the State Revenue Committee. Based on its results, a new information architecture of the State Revenue Committee will be formed. Regardless, this year we will complete the integration of tax and customs information systems. Instead of 14 systems, only five will function. Thus, a fundamentally new unified digital system will be created. It will become a service model of business support at all stages of the life cycle and significantly reduce the administrative burden on entrepreneurs," the Minister said. 

Kazakhstani taxpayers are informed about upcoming deadlines for tax payments and tax reporting through push notifications. The E-Salyq Business mobile application has made it possible to eliminate the need for reporting for entrepreneurs who apply a special tax regime: the programme automatically determines income and calculates taxes.

The availability of such a mobile application made it possible to launch a pilot project on platform employment in September 2023. At its first stage, a co-operation agreement was concluded with "Yandex. Taxi". About 10 thousand taxi drivers from Astana and Almaty are already participating in the pilot. Astana and Almaty. 

In the process of development - expansion of the line of digital solutions. This year the department plans to implement 20 additional services.

It is emphasised that, in general, such a transition to a proactive model without emphasis on fiscal measures will allow Kazakhstanis not to waste time on calculating taxes and the correctness of their calculation.

At the same time, a full-fledged service model of business support requires filling with information from databases of other authorised state bodies, including their integration. During the year it is planned to complete the expansion of the functionality of the IS "ESF" and RMS in order to develop the ability to control and analyse data from multiple sources, use modern analysis tools, expand the scope of application of RMS and identify risks. 

It will also ensure the transfer of the existing functionality of the information systems "ASTANA-1" and "Single Window" to the customs system IS "KEDEN", which is being created. New services and modules will be developed within its framework. 

At the same time, work on the creation of a new digital platform of the Ministry of Finance is beginning. It is expected to solve a number of issues such as: 

- exercising preventive control over the budget - from planning to spending;

- analysing the impact of state support measures, incentives and other factors on companies and production;

- use of information to assess the investment attractiveness of the market.

"The Ministry of Finance to continue comprehensive work on the execution of the revenue side of the budget, improving tax and customs administration, as well as digitalisation of their processes," Madi Takiev summed up his report.

#Digitalization #Government session #Ministry of Finance #Tax Policy