At the Government session chaired by the prime minister of Kazakhstan, measures to implement the Address of the Head of State “Constructive Public Dialogue – the Basis of Stability and Prosperity of Kazakhstan” were considered. First Deputy Prime Minister – Minister of Finance Alikhan Smailov reported on the financial sphere of the issue.

The President of Kazakhstan Kassym-Jomart Tokayev, in his Address noted the need for the implementation of structural transformations that will help to stably ensure annual GDP growth of at least 5% by 2025.

According to Smailov, for this the Government will continue to diversify the economy and will intensify the functional analysis of the activities of both state bodies and the quasi-public sector. Studies of Kazakhstani and foreign analysts will be carefully analyzed.

The Head of State in the Address also noted that in order to increase the efficiency of the work of civil servants, it is necessary to attract trained young personnel to their ranks.

“Starting in 2020, we will begin to gradually reduce the number of civil servants, and we will use the released funds to provide material incentives for the most useful workers. By 2024, the number of civil servants and employees of national companies will be reduced by 25%,” Smailov said.

According to him, the priority is to increase the return on the quasi-public sector.

“We will evaluate the real contribution of the National Welfare Fund to the growth of the welfare of the people over the past 14 years. The Government, together with the Accounts Committee, will conduct a three-month analysis of the effectiveness of state holdings and national companies,” Smailov assured.

About 100 billion tenge were allocated from the National Fund to reduce unemployment and improve the living standards of the rural population. By the end of this year, a legislative framework will be developed for exempting micro and small business companies from paying taxes from their main activities for a period of three years. From January 2020, a three-year ban on inspections of micro and small business entities will come into force.

At the same time, the Ministry of Finance of the Republic of Kazakhstan has developed a bill on public procurement, which is also aimed at stimulating small businesses.

“Work will be strengthened to stimulate cashless payments, counteract the shadow economy, and the fight against the withdrawal of capital and tax evasion has been tightened. Recently, the work of the economic investigation service has been reformatted and optimized,” Smailov said.

As part of the Address, the Head of State instructed to modernize the tax system with a focus on a more equitable distribution of national income. To this end, the Government will take measures to improve the quality of the current tax system, encouraging companies to invest in human capital, in raising labor productivity, technical re-equipment, and export. Payments and fees not stipulated by the Tax Code will be prohibited.

In order to increase the efficiency of using budgetary funds and the National Fund, together with the National Bank by the end of this year, specific proposals will be developed to improve the quality of investment and use of the National Fund.

“To strengthen social support for the population, reserves will be further sought by reducing all inefficient spending and increasing budget revenues,” Smailov said.

The Ministry of Finance has launched comprehensive work to improve and strengthen customs administration. The public procurement system will be further improved.

“An appropriate bill has been developed which is aimed at stimulating fair competition, reducing corruption risks, as well as improving the quality of goods, work, services and qualifications of suppliers. All this will make it possible to receive additional revenues to the budget,” Smailov said.

At the same time, in order to optimize costs and improve the quality of investment asset management, the Government was instructed to study the issue of consolidating the extrabudgetary social security system by creating a unified social fund and introducing one social payment.

“In the near future, this work will be done by us. The organization of the budget process at all levels will also be built with the real involvement of the population in the formation of local budgets. In order for the district, city and rural levels of power to become economically more independent in solving local problems, relevant legislative acts will be adopted,” Smailov added.