BAKU, Azerbaijan, September 29. Kazakhstan's government tax reforms will likely further strengthen fiscal resilience, Moody's Ratings said in its rationale for affirming Kazakhstan's Baa1 rating.
“The new tax code effective from January 2026 raises the value-added tax rate, introduces progressive personal income taxation and increases taxes on selected businesses, luxury assets and excisable goods,” Moody's said.
The agency noted that widening the revenue base will reduce fiscal exposure to commodity price volatility. Stronger digital tax administration will also improve tax collection and reduce leakages.
“We expect these reforms to support relatively modest budget deficits, keeping Kazakhstan's debt burden low relative to peers. However, the eventual revenue yield, the pace of reduction in transfers from the National Fund of the Republic of Kazakhstan and the effect of higher taxes on domestic demand remain important uncertainties,” Moody's said.
The agency also noted that Kazakhstan's strong government balance sheet remains a central support for the Baa1 rating. The sovereign's low debt burden, high debt affordability and sovereign wealth fund assets provide policy flexibility and a significant buffer against economic shocks.
Government debt amounted to 22.8% of GDP in 2025, well below the median for similarly rated sovereigns. Although high domestic interest rates have weakened debt affordability compared with previous years, it remains stronger relative to peers, and Moody's expects stronger revenue collection and the gradual normalization of monetary conditions to limit further deterioration.
Moody’s affirmed the Government of Kazakhstan’s local and foreign currency long-term issuer ratings at Baa1, with a stable outlook. The agency also affirmed the foreign currency senior unsecured debt and MTN programme ratings at Baa1 and (P)Baa1, respectively.
