Kazakhstan VAT revenue rises 43% after rate hike to 16%, expert cautions on attribution

September 3, 2026 at 09:39 AM2 min

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Kazakhstan's VAT revenue rose 43.1% to 1.2 trillion tenge in the first half of 2026 after the standard rate increased from 12% to 16% on January 1. Tax consultant Raushan Tashshoinova cautioned that the gain reflects multiple factors, not just the rate hike. She also advised against raising VAT to 20% until the impact of the current rate is fully assessed.

Key Facts

VAT revenue in Kazakhstan rose 43.1%, or 1.2 trillion tenge, in the first half of 2026 compared with the same period last year.
The number of VAT payers increased from 135,800 to 158,200 in the first half of 2026, a rise of more than 22,000 entities.
The average standard VAT rate in OECD countries is 19.3%, but rates range from 8.1% in Switzerland to over 20% in many European countries.
The IMF estimates that moving to a 16% VAT rate could increase Kazakhstan's government revenue by about 1.5% of GDP.
Kazakhstan's VAT rate was 20% in 1995 and was gradually reduced to 12% by 2009, where it remained for 17 years until January 1, 2026.

Revenue Impact

VAT revenue in Kazakhstan rose 43.1%, or 1.2 trillion tenge, in the first half of 2026 compared with the same period last year. Republican budget revenue excluding transfers reached 8.5 trillion tenge, up 24.6%, or 1.7 trillion tenge. Tax consultant Raushan Tashshoinova said it is premature to attribute the entire increase to the higher VAT rate. She noted that the first-half statistics include payments under both the old and new rates, and that other tax parameters changed simultaneously.

Factors Behind Growth

From January 1, 2026, the VAT registration threshold changed to 10,000 MCI, and the number of VAT payers increased from 135,800 to 158,200 in the first half of the year. Turnover in the electronic invoice system increased by almost 12%, or 10.8 trillion tenge. Tashshoinova said the additional 1.2 trillion tenge should be viewed as total VAT revenue growth, not solely the result of the rate increase. She emphasized the need to separate the effects of the higher rate, increased turnover, expanded taxpayer base, and administrative changes.

OECD Comparison

The average standard VAT rate in OECD countries is 19.3%, but rates vary widely, from 8.1% in Switzerland to 10% in South Korea and over 20% in many European countries. Tashshoinova said comparing countries only by rate size is incorrect because tax base, exemptions, economic structure, and administration quality affect revenue. She noted that no OECD country is a full analogue of Kazakhstan, though Mexico, Chile, Colombia, and Turkey have some similarities. In Mexico, the standard VAT rate is 16%, but many food and medicine items are zero-rated, and actual revenue is about 35% of potential. In Chile, the 19% VAT rate yields about 67% of potential revenue and accounts for over 29% of total tax revenue.