The Deputy Prime Minister Zhumangarin has been caught in a lie.

“Earlier, on February 25, Exclusive.kz published the news titled ‘Why did Serik Zhungarov mislead in his interview?’ which revealed the falsehood of the Minister as reported by ‘Kazakhstan Pravda’. He claimed that the VAT registration threshold in Russia is 10 million tenge, while in Uzbekistan and Kyrgyzstan it is 30 million each, whereas the actual thresholds for VAT application in these countries are different and significantly exceed the proposed threshold of 15 million tenge in Kazakhstan’s tax reform. After the news was disseminated, part of the comparison between the proposed VAT registration threshold in the tax reform and those in neighboring countries was removed from the interview published in ‘Kazakhstan Pravda’,” noted the publication Exclusive.kz.

As Exclusive.kz points out, “Zhungarov's statement regarding the VAT thresholds in neighboring countries is essentially a lie.”

“According to information on the website of the Federal Tax Service of Russia, the VAT exemption indeed applies until reaching a turnover of 2 million rubles, or approximately 11.5 million tenge at the current exchange rate; however, this value is calculated not annually as in Kazakhstan, but over the preceding three consecutive calendar months. Furthermore, when a business registers for the simplified tax system, VAT is not applied until the annual turnover reaches 60 million rubles, which is 348 million tenge.

In Uzbekistan, according to the Tax Code, VAT begins to be paid upon reaching a turnover of 1 billion sums — this is not 30 million tenge as claimed by Serik Zhungarov, but 38.7 million. One cannot attribute the difference to a mere rounding, as the exchange rate has never dropped to such a low level.

In Kyrgyzstan, according to information on the website of the State Tax Service under the Ministry of Finance, the simplified taxation system without paying VAT operates until reaching a threshold of 8 million som — this is 45.7 million tenge at the current rate, which does not at all correlate with the minister's statement about allegedly ‘30 million,’” the publication explains.

Later, the chief editor of Exclusive.kz, Karlygash Ejenova, commented on the situation on her Facebook page.

“Yesterday, a funny story occurred, which can, however, be called quite typical for our government. The Deputy Prime Minister decided to checkmate all opponents in his interview with ‘Kazpravda’. Specifically, he stated that ‘it is proposed to lower the VAT registration threshold to 15 million tenge. In this case, 80% of entrepreneurs with income up to 15 million tenge fall into the category of micro and small businesses. For comparison: in Russia, this threshold is 10 million tenge, in Uzbekistan — 30 million, in Kyrgyzstan — also around 30 million.’ <…> In the evening after our publication, the Deputy Prime Minister's interview was corrected! So, do you understand how things are done here?! That’s how it turned out to be a zugzwang,” writes Karlygash Ejenova.

Let us remind you that the government proposes to set the base VAT rate in Kazakhstan at 16% and reduce the VAT registration threshold to 15 million tenge. The authorities also plan to review the retail tax regime.