Kazakhstan to halve corporate tax rate

business and economy

By SRI ⋅ July 7, 2008 ⋅

Kazakhstan may halve the corporate income tax rate to 15 percent while introducing a tax of up to 20 percent that will apply only to the oil and mining sectors, Askar Aubakirov, a member of the working group that is developing the new tax code, said on Friday.

The government is drafting a new tax code that is expected to come into effect at the beginning of next year. The simplified structure of the new tax plan should foster economic growth thanks to lower overall taxes and boost revenues from the key oil and mining industries.

On Friday, Aubakirov, the executive director of KazEnergy, an oil industry group headed by President Nursultan Nazarbayev’s son-in-law Timur Kulibayev, shed some light on the tax reform plans.

“The corporate income tax will be reduced from 30 percent to 15 percent. The gap will be compensated for by the mineral resources tax,” he said at a press conference discussing the impact of the tax reform on mineral resources companies operating in Kazakhstan.

He said the government was considering two schemes for the minerals extraction tax, which will replace royalty payments. It will introduce either a flat 20 percent rate or a scale ranging from 5 to 20 percent depending on extraction volume.

Earlier this year, Kazakh Prime Minister Karim Masimov said that the government intends to considerably reduce the corporate income tax rate.