BAKU, Azerbaijan, Dec.4
By Nargiz Sadikhova - Trend:
The decision to increase the cost of excise tax on petrol in Kazakhstan is connected to a number of factors, Kazakhstan’s First Deputy Prime Minister – Minister of Finance Alikhan Smailov said, Trend reports with reference to Kazakh media.
On November 25, 2019 Kazakhstan’s Ministry of National Economy announced increase of excise tax on petrol will lead to a six percent increase of petrol prices in Kazakhstan. Starting from January 1, 2019 excise tax which currently equals 8 tenge (2.1 cent) will be increased by 10 tenge (2.6 cents).
According to the minister, the increase of the tax is expected to be 10 tenge (2.6 cents), which indicates a price increase by approximately six percent and shouldn’t significantly affect the inflation in the country.
Talking on the reason for the cost increase, Smailov noted that firstly, the expenditures of social areas are to increase next year.
“In particular, the project of republic budget oversees nearly six trillion tenge ($15.4 billion) on social area, whereas this year the allocated sum amounted to 5.3 trillion tenge ($13.6 billion),” the minister said.
Furthermore, Smailov noted, Kazakhstan is under the process of adopting the bill ‘On Status of the Teacher’, which oversees double increase of the teachers’ and educators’ wage in the next four years.
“This year the wage will increase by 25 percent, and it will double in the next four years. This also requires additional funds,” Smailov said.
Also, according to the minister, due to the planned in 2020 exemption of micro and small business from paying taxes on the main activities for three years, the revenues to the budget will decrease.
“We have decreased the revenue part of the budget to the exemption. This is why one of the sources of revenue is to be the excise tax. However, the main source will be the improvement of customs and tax administration. The overall income to the budget increased by 911 billion tenge ($2.3 billion) over 10 months of 2019. The payments to the budget are expected to be 1.2 trillion tenge ($3 billion) this year, including 840 billion tenge ($2.1 billion) via improvement of customs and tax administration,” Smailov said.
He also noted that the increase of excise tax cost in 2020 is one of the ways to increase the budget revenue, which will allow to collect over 50 billion tenge ($129.1 million) worth of additional funds.
“Another reason are the prices on petrol in neighboring countries. In particular in Russia. As you know that currently cost of RON-92 petrol in Kazakhstan is about 163 tenge per liter (42 cents), whereas the RON-92 petrol cost in Russia is 260 tenge per liter (67 cents). In this regard, Kazakh petrol gets smuggled to Russia and we have to take measures to prevent this from happening,” Smailov concluded.
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