Kazakhstan replaces National Fund revenue with costlier borrowing as debt service rises 26%
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Kazakhstan's consolidated tax revenue rose 15.2% to 14.4 trillion tenge in the first half of 2026, with the republican budget accounting for the entire 1.9 trillion tenge increase, the AFC analytical centre said. Republican budget spending grew 8.6% to 19 trillion tenge, led by a 26.2% jump in debt service to 433 billion tenge, while guaranteed transfers from the National Fund fell to 1.9 trillion tenge from 3.1 trillion. Government debt climbed to 40.9 trillion tenge, up 14.7%, and debt-servicing costs rose 26.3% to 2.1 trillion tenge.
Key Facts
- Kazakhstan's consolidated tax revenue rose 15.2% to 14.4 trillion tenge in the first half of 2026, with the republican budget providing the entire 1.9 trillion tenge increase.
- VAT added 1.2 trillion tenge, or 43.1% of republican budget tax growth, alongside corporate income tax at 328 billion tenge and non-oil mineral extraction tax at 320 billion tenge.
- Republican and local budget expenditures grew 8.6% to 19 trillion tenge, with debt service up 433 billion tenge, or 26.2%, and defence spending up 307 billion tenge, or 73.6%.
- Guaranteed transfers from the National Fund fell from 3.1 trillion to 1.9 trillion tenge, while new borrowing increased to 3.7 trillion tenge from 3.4 trillion.
- Government debt reached 40.9 trillion tenge, up 14.7%, and debt-servicing costs rose 26.3% to 2.1 trillion tenge.
Tax Revenue Gains
Kazakhstan's consolidated tax revenue rose 15.2% to 14.4 trillion tenge in the first half of 2026, compared with 11.2% growth a year earlier, the AFC analytical centre reported. The republican budget delivered the entire absolute increase of 1.9 trillion tenge, or 29.8%, while National Fund revenue fell 1% and local budget revenue slipped 0.3%. VAT generated 1.2 trillion tenge, or 43.1% of republican budget tax growth, alongside corporate income tax at 328 billion tenge and non-oil mineral extraction tax at 320 billion tenge. AFC analysts linked the VAT increase to a higher rate, a broader tax base and stronger administration, while corporate income tax growth was attributed partly to a lag in tax payments and improved collection. Non-oil mineral extraction tax rose 59.9% to 320 billion tenge, supported by favourable metals prices.
Expenditure and Debt Financing
Combined republican and local budget expenditures grew 8.6% to 19 trillion tenge in the first half, down from 13.3% growth a year earlier. The republican budget's main increases were debt service at 433 billion tenge, or 26.2%, social assistance at 387 billion tenge, or 12.9%, and defence at 307 billion tenge, or 73.6%. Guaranteed transfers from the National Fund fell from 3.1 trillion to 1.9 trillion tenge, increasing the role of debt financing. The budget deficit narrowed to 2.4 trillion tenge from 2.9 trillion a year earlier, while new borrowing rose to 3.7 trillion from 3.4 trillion tenge. AFC concluded that reduced use of National Fund money is being replaced by more expensive market financing, making the budget more sensitive to interest rates.
Debt and National Fund
Government debt climbed to 40.9 trillion tenge, up 14.7% from a year earlier. Debt-servicing costs rose 26.3% to 2.1 trillion tenge, reflecting a larger debt stock and higher cost of new borrowing under tight interest-rate conditions. Within the National Fund, oil-sector corporate income tax rose 60.8%, but mineral extraction tax fell 47.9% and production-sharing payments declined 8.7%. Oil extraction volumes fell 8.4% in the first half, and higher oil prices only partially offset the deterioration in oil and gas production indicators. In early June, the Finance Ministry said the state debt remains at a manageable level and has no negative effects.
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Kazakhstan replaces National Fund revenue with costlier borrowing as debt service rises 26%
