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OECD Investment Policy Reviews: Kazakhstan 2017

image of OECD Investment Policy Reviews: Kazakhstan 2017

This review, which was prepared in response to Kazakhstan's 2012 request to adhere to the Declaration on International Investment and Multinational Enterprises (OECD Declaration), analyses the general framework for investment as well as most recent reforms, and shows where further efforts are necessary. It assesses Kazakhstan’s ability to comply with the principles of openness, transparency and non-discrimination and its policy convergence with the OECD Declaration, including responsible business conduct practices. Capitalising on the OECD Policy Framework for Investment, this review studies other policy areas that are of key relevance to investment such as SME policy, infrastructure development, trade policy as well as anti-corruption efforts. Since the first review of Kazakhstan, in 2012, the authorities have made strides in opening the country to international investment and in improving the policy framework for investment as part of their efforts to diversify the economy to avoid continued overreliance on oil. Additional policy measures are nevertheless required to create a stimulating environment for investment if the government wants to fulfil its goal of economic diversification and sustainable development.

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Kazakhstan's tax policy

Kazakhstan’s ambition of joining the top 30 most developed countries by 2050 will largely depend on its ability to create an investment-stimulating business environment, putting in place the ingredients necessary for the private sector expansion, including, more importantly than ever, diversification of investment into non-extractive industries. Kazakhstan’s tax regime is one of the key policy instruments that can either encourage or discourage investment. Kazakhstan has been offering generous tax incentives to make the investment climate more attractive. Despite on-going efforts aimed at rationalising investment incentives, the taxation regime remains somewhat complex, the country applying tax reliefs that vary depending on the type of investment, its location or activity. There is uncertainty as to whether they meet their intended objectives. In general, there has been inadequate analysis to assess their effectiveness. Establishing mechanisms to regularly evaluate the costs and benefits of tax incentives would help assess them against their intended policy objectives as well as the associated fiscal cost.

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