Skip to Content

Bakytzhan Sagintayev: Receiving state support requires responsibility of business for competitiveness of goods and services

by December 5, 2018 Market

In his speech, the Prime Minister Sagintayev noted that the day before, at a meeting of the Security Council chaired by the Head of State, the external challenges and threats, both economic and political, were raised. The Government presented its vision and inferences. At the same time, it is noted that this work can be done only together with the business community.

At the meeting, key results of the joint work of the state and business were identified. So, since the early 2018, a new tax code has been in place that simplifies tax administration. From Jan. 1, 2019, a tax amnesty will be held for 89 thousand small and medium-sized businesses on accrued penalties and fines. At the same time, the threshold of criminal liability for tax offenses will rise (approx. from 20 thousand to 50 thousand MCI damage with replacement with administrative fines). These questions were carefully worked out with the Atameken Chamber.

The new Customs Code, which has also been launched since the beginning of 2018, increases the transparency of procedures and reduces the rates of customs duties. The customs infrastructure for the development of international trade has been updated, the Nur Zholy automobile checkpoint with new types of equipment, has been launched on Khorgos.

The systemic reforms introduced in the Business Code have already reduced checks by 76.6% (over the past eight years) � from 349 thousand to 81.6 thousand or more than fourfold. In addition, the control oversight of the business has been reduced. Control functions are reduced by 30%, and this work continues.

According to the Prime Minister, digitalization provides great opportunities. More than 60% of state services have already been converted into electronic format, about 80% of them are provided by the Government for Citizens. The Astana Hub International Technopark was launched, on the site of which the Government, together with Atameken, plans to work on the further development of the technopark, which should become the center of the innovation ecosystem

Incentives for e-commerce and an increase in the turnover of non-cash payments have been regulated legislatively. According to statistics, tens of thousands of new jobs are opening up in this area. The big question that is raised by both the society and the Parliament of Kazakhstan is the reduction of the shadow sector. Most of this is in the trade sector. In this regard, in order to get the business out of the shadows, the support of the business community itself in the implementation of policies and the strengthening of control over unscrupulous entrepreneurs who evade taxes are needed.

In addition, the Head of State in his Address Growing Welfare of Kazakh Citizens: Increase in Income and Quality of Life instructed the Government to take measures to support the economy through additional funding. Thus, 600 billion tenge allocated by the National Bank will be aimed at ensuring long-term liquidity and lending to priority projects. The Government, together with the Atameken, worked out the mechanism, determined the corresponding product position, prepared a road map, participating banks, identified the tools. By the end of 2018, it is planned to select areas and projects that will be provided with support measures from early 2019.

At the same time, the focus will be on projects that potentially have multiple economic and social benefits for the country.

The Business Roadmap will be extended until 2025 with an additional allocation of 30 billion tenge annually. In addition, 500 billion tenge is directed to additional support for the manufacturing industry and non-primary exports over the next three years. Thus, all the necessary funds have been allocated for business development in priority sectors of the economy. A lot of work has been done on microcredit, all errors for 2018 have been eliminated. This will allow to reach all indicators on microcredit and microfinance in 2019.

In order to develop agriculture further, the program of the agro-industrial complex has been updated. Every year, in addition to the funds provided for under the state program, 100 billion tenge will be allocated to this area. Along with this, today new markets for domestic products are opening up. In particular, a large Chinese market: the PRC Government proposed, by creating joint ventures with Chinese partners, to send Kazakhstani products through China to third countries in Southeast Asia.

The Prime Minister drew particular attention to systemic issues that require direct participation and engagement of the country’s business community. One of these issues is the social responsibility of business. It is indicated that obtaining support from the state requires appropriate business responsibility for the competitiveness of goods and services produced in terms of price and quality.

Systemic issues also include the advancement of special economic zones, ensuring the availability of funds, access of large holdings and companies to government procurement, the development of mass entrepreneurship and productive employment, public-private partnerships, privatization, and tariff setting. In this sector, it is noted that the work carried out to reduce tariffs should not affect the quality of services provided and the reduction of the investment component.

Concluding his speech, Sagintayev noted that the Atameken presented more than 500 problematic issues to the Government, and none of them went unheeded. Of the 552 questions, 506 were resolved, and some were excluded from the registry due to the loss of relevance. Thus, the overall work of the Government and Atameken yields its results: according to the Doing Business ranking, Kazakhstan took the 28th place, in the Parliament there is the seventh package of amendments on the development of entrepreneurship.

The work done on 10 strategic objectives and upcoming plans until 2023 was reported by the deputy chairmen of the Atameken Rustam Zhursunov and Eldar Zhumagaziev.

Zhursunov noted that in recent years the unprecedented work has been done to deregulate the business, the number of requirements was reduced, the state control system was optimized, as a result of which the one-time business costs were reduced by 600 billion tenge.

In addition, the business will save about 5.5 billion annually. On the protection of business, over 25 thousand complaints were received, of which more than 43% were positively resolved. The total amount of financial rights saved (cancellation of penalties and fines) is more than 130 million tenge. Since 2014, systemic business problems have been solved: 605 issues have been identified, 427 of which have been resolved. In addition, over the past three years, criminal cases in the economic sphere have decreased by five times, which means that more than 20 thousand businessmen remained in economic circulation, retained their enterprises and jobs.

The Deputy Chairman of Atameken National Chamber of Entrepreneurs Eldar Zhumagaziev, in turn, reported that 30 thousand people were trained under the Bastau project in 2018, 124 projects were financed. For 2.5 years, work has been carried out to develop its own microfinance system: in six regions, 1,900 projects have been funded for 7 billion tenge.

A lot has been done during this time, one thing is obvious � we have a clear idea in which direction to develop further. The key goal for the near future is to assist entrepreneurs in solving problems with financing, with sales, as well as with access to competences for solving legal issues. To do this, we will change the functional structure emphasizing the principles of customer-centeredness, focus and project approach, said Zhumagaziev.

Chairman of the National Chamber of Entrepreneurs Ablay Myrzakhmetov expressed gratitude for the support measures provided by the state with regard to business, especially the manufacturing sector.

Myrzakhmetov identified five areas of the target economic model. These are monetary policy, a decline in the state’s share in the economy, a business climate in the regions, tax policy, and an increase in the effectiveness of government measures.

Following the hearings of the reports, business representatives voiced a number of topical issues. The topics of restraining the unreasonable growth of prices for socially important food products, the course of the privatization program in the country, etc. were raised.

Chairman of the Presidium of Atameken Timur Kulibayev, summing up the discussion, noted that in the five years of the chamber’s work, the agenda had been synchronized: the Government supported the issues raised by business. At the same time, attention was paid to efficiency issues. A proposal was made to install a key performance indicators system for managers of holdings and government agencies that have the opportunity to make long-term purchases so that they can see which projects we can localize. This will increase the transparency of procurement in the quasi-public sector. In addition, the importance of supporting domestic producers in terms of presence in the Eurasian Economic Union was noted.

Kulibayev thanked the deputies and the government for their systematic work and effective support, noting that a huge body of legislative initiatives was jointly implemented. The board maintains feedback with regions and all industry associations. Today, more than two-thirds of the issues have been resolved, the work continues for more than 100 of them.

In his closing speech, Prime Minister Bakytzhan Sagintayev said that the questions from business on work in the regions that are open would be considered at a Government meeting. Attention was also paid to the prospects for expanding the presence of Kazakhstani products in foreign markets and the involvement of domestic entrepreneurs in integrated work to improve the quality of training.

Source: The Prime Minister of Kazakhstan