Responding to business concerns over rising costs and inflation, the Kazakh government has sharply reduced the number of prohibited activities under the new special tax regime, allowing many SMEs to retain simplified tax treatment.
In late October 2025, the Kazakh government announced a partial rollback of several measures in its new Tax Code, responding to concerns that certain provisions would place an excessive burden on small and medium-sized enterprises (SMEs) and exacerbate inflationary pressures. The most notable adjustment relates to the list of prohibited activities under the special tax regime.
While the original proposal had expanded the list to 359 types of activities, the government has scaled this back significantly, ultimately retaining only 44. This change allows many SMEs to continue benefiting from simplified tax treatment.
In addition to revising the list, the government has introduced further relief measures.
SMEs are now exempt from penalties and fines until 1 April 2026, and micro and small businesses will not be subject to inspections or desk audits during this period. These steps are part of a broader effort to reduce the immediate economic impact of the reform, particularly at a time when annual inflation remains high at 12.9% in late September.
Although these concessions are expected to result in a short-term revenue loss of around 50 to 60 billion tenge, the government believes these gaps can be closed through more effective tax and customs administration. Officials have indicated confidence that stronger enforcement and digitalisation efforts will be sufficient to compensate for the rollback.
President Tokayev and the Ministry of Finance continue to emphasise that supporting SMEs remains a priority of national policy. The government has affirmed its commitment to maintaining simplified tax regimes where feasible and has pledged to continue engaging in dialogue with the business community as reforms are implemented.
Authorities have also noted that certain fiscal obligations will be delayed, and that more inclusive consultation will take place before introducing further regulatory changes. Efforts are also being made to improve targeting in social spending by using IT systems to detect and prevent welfare fraud.
Despite the softening of some measures, the broader reform objectives remain in place.
The government still aims to increase tax revenues by 3.7 trillion tenge in 2026. This will largely be achieved through the planned increase in VAT: reportedly to 16% which points at the gradual removal of some tax exemptions, and ongoing improvements in tax administration. Importantly, officials have stated that Kazakhstan will avoid targeted withdrawals from the National Fund in 2026, relying only on the legally guaranteed transfer amount.
To support this fiscal strategy, the government has recently tapped international capital markets, issuing USD 1.5 billion in Eurobonds to help cover the 2025 budget deficit. The successful issuance was seen as a signal of investor confidence in Kazakhstan’s economic direction.
