International practices impose strict penalties for tax evasion:
1. In Germany, there is a prison sentence of up to 10 years for tax fraud.
2. In the USA, property confiscation and hefty fines are imposed.
3. In France, strict measures can be taken, including the complete suspension of a company's operations.
Bektenov's two stars on his epaulettes are not without reason…
All of this was revealed by Prime Minister Bektenov.
It is now being openly stated that not only limited liability partnerships (LLPs) but also joint-stock companies (JSCs) are evading taxes, having fragmented into thousands of entities.
The Ministry of Finance initiated checks within the framework of analyzing the mutual settlements of companies operating under special tax regimes in 2022 and 2023 compared to those working under the general regime.
1. The state revenue authorities sent a notice to BI Group indicating a reduction of taxable income by 11.9 billion tenge, and BAZIS by 4.6 billion tenge. The analysis showed that these companies were using the special tax regime to reduce their tax payments.
2. As explained by the Ministry of Finance, the cameral control procedure allows taxpayers to independently adjust their income and pay taxes without undergoing a formal audit.
3. In this regard, BI Group construction company responded to the suspicions regarding tax transfers: “As a major taxpayer in the construction sector, we responsibly declare that we fulfill all mandatory payments to the budget honestly and in full. Our tax transfers are regularly audited by authorized bodies, and there have been no claims following those audits. The company undergoes financial statement audits annually by independent international auditing firms such as KPMG and Ernst & Young.”
4. A response was also received from BAZIS: “The BAZIS group of companies has been operating in Kazakhstan's construction market for over 30 years, making a significant contribution to the country's economic development.
“Throughout these years, we have remained one of the major taxpayers in the construction sector, fully complying with all tax obligations within the legislated deadlines,” they stated.
They also clarified that the presence of subsidiary companies within BAZIS does not constitute a method of business fragmentation.
“This requirement is based on the law on shared participation, which stipulates the creation of a separate legal entity for each new housing construction project. This is a legal norm established by Kazakh law, and we strictly adhere to it.”
Political scientist Daniyar Ashimbaev stated on his Telegram channel that the country is witnessing the beginning of significant changes
Initially, there was a warning about the need to repay debts. Despite resistance from banks, debt repayments started. Furthermore, there were protests in the blogosphere, which had become a tool for criticizing the government's fiscal projects. However, since yesterday, it has been reported that bloggers have also begun to pay their outstanding taxes. “The explanation became clear: everyone sees the tax complaints against their Russian counterparts and the local experience of dealing with bloggers who have fallen into political provocation and extortion. The number of subscribers and likes provides no guarantee,” he wrote.
The expert further explained the beginning of a new phase
Prime Minister Bektenov first held a meeting regarding schemes of tax burden optimization through business fragmentation. It is anticipated that fiscal structures have been preparing to collect information and analyze the situation for some time. This was revealed during discussions on the new code last year.
“Global experience is very strict regarding business fragmentation schemes. In several countries, this is considered a criminal offense. Our approach is generally liberal, but many schemes operate within the law. It is clear that businesses prefer to operate under favorable regimes, but in practice, the discussion is often about concealing income rather than optimization,” Ashimbaev explained.
In the coming days, everyone will receive notifications about additional tax assessments, and if they fail to pay, then the state reserves the right to utilize all state-owned resources, including fiscal and law enforcement resources
He indicated who would be subject to checks soon.
“According to Finance Minister Takiyev's report, Bektenov stated that some entrepreneurs have begun to behave unacceptably by employing various schemes to optimize their tax burden. With billions in turnover, they pay amounts to the budget that are entirely inconsistent with their profits. We have a complete list of such large companies. In the coming days, everyone will receive notifications about additional tax assessments, and if they fail to pay, then the state reserves the right to utilize all state-owned resources, including fiscal and law enforcement resources. It is appropriate to consider construction companies: their appetite is not particularly popular in society,” the expert elaborated.
He then analyzes the development of the situation as follows:
1. The government is moving forward within the framework of recommendations previously provided by experts: improving administration and further enhancing administration.
2. The Cabinet of Ministers seems to have several additional trump cards — shadow foreign economic activity and large private businesses without any registration.
“Bektenov's two stars on his epaulettes are not without reason. As a former security officer, he knows how to work with complex contingents. Additionally, I want to remind you that the purpose of tax policy is not only to replenish the budget but also to stimulate economic development. Another important issue is optimizing expenditures and improving monitoring of state investment policy,” Ashimbaev said.