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By 2025, number of people employed by small and medium-sized business to reach 4 million — Ruslan Dalenov

Tuesday, 25 February 2020, 11:58:11

During the regular Government session, measures to improve the business climate of Kazakhstan were considered.

According to the Minister of National Economy Ruslan Dalenov, the key areas for improving the business climate are providing state support measures, improving legislation and simplifying the regulatory environment.

The strategic objective is to increase the share of small and medium-sized businesses in the economy up to 50% by 2050.

“The share of SMEs in the economy is increasing. According to current data, in 2019 amounted to 29.5%. Our goal for 2020 is to increase the share of SMEs in GDP to 30%, by 2025 — to 35%, and by 2050 — to 50%. This corresponds to the level of developed countries,” Dalenov said.

According to the minister of national economy, small and medium-sized businesses are a key element of economic growth and employment. Developed countries are characterized by a large number of operating SMEs. The larger the number of SMEs, the larger the size of the economy. Also, indicators of foreign countries show that the higher the share of SMEs in the economy, the higher the employment of the population. Small and medium enterprises create the main jobs.

Thus, it is important to improve legislation and the regulatory environment, focusing on the standards of the Organization for Economic Cooperation and Development.

Entrepreneurship is supported by the state programs Business Roadmap, the Economy of Simple Things and Enbek.

“In 2019, within the framework of these programs, financial support was provided to 22 thousand projects. The business received preferential financing and infrastructure. Along with financial support, 106 thousand entrepreneurs were trained in the basics and functional areas of business. Service support received 41 thousand entrepreneurs. These are services related to accounting and tax accounting, legal services, marketing issues and more,” Dalenov informed.

According to him, the following measures were taken to develop entrepreneurship.

First. Last year, 7 packages of legislative initiatives were adopted, providing for about 100 amendments on the development of the business environment. Today, Kazakhstan is in the top 25 countries with the most favorable business climate among 190 countries.

Second. By order of the Head of State, a moratorium on inspections and payment of income taxes for micro and small businesses was introduced. According to estimates, 1.2 million micro and small business entities will save 382 billion tenge in taxes over three years.

Also, as a result of the moratorium, over 100 thousand inspections will not be carried out for 3 years. This will reduce the administrative burden and will contribute to the stability of doing business.

Third. By order of the Head of State, norms were initiated to introduce the principle of the presumption of good faith. All outstanding issues will be resolved in favor of the business.

It also initiated the introduction of transitional practices. If business requirements change, they should not be introduced immediately, but after a certain period, so that the business can prepare.

A single day of the report of regulatory authorities to the business community will be introduced. Such a report will be held annually.

“In pursuance of the instructions of the Head of State of data at an expanded meeting of the Government, it is necessary to adopt the 8th package of reforms to improve the business climate, launch the Government for Business service, and implement the smart regulation tool, which will greatly facilitate business in Kazakhstan,” said Dalenov.

 

Eighth reform package to improve the business climate

The 8th package of legislative measures provides for the implementation of legislative amendments to create favorable conditions for business development. This is a simplification of the contract registration procedure.

The registration procedures for VAT payers will also be accelerated. It will provide for automatic opening of a bank account when registering a business online. Duplicate unnecessary notifications for individual procedures are also excluded.

Real estate information will be disclosed to legal entities. This will allow safe transactions.

 

Government for Business

A new format of interaction between the state and business will be introduced on the principle of a single office for the provision of services. In a single office, Government for Business, entrepreneurs will receive a full range of services and advice on the development of their business, improving competencies and financing.

According to the minister of national economy, in a single office it will be possible to open an enterprise, file a tax return, compare bank conditions and much more. Now the business will know exactly where to turn to and where to get answers, regardless of the complexity of the questions that arise. A pilot launch of the Government for Business service is scheduled for June 2020.

 

Smart Regulation Tool

Improving the tools of smart regulation is in line with the best practices of developed countries.

The Smart Regulation is the reduction of excessive duties, prohibitions, restrictions for entrepreneurs and the identification of unreasonable expenses for business. The Smart Regulation tool includes a service model for interacting with a business, automation of a risk management system, and smart deregulation.

 

Deregulation

According to Dalenov, before introducing a new requirement it is necessary to analyze the impact on the business. Such an analysis must be carried out in a new form. This is the maximum reduction of regulation, the introduction of the principle of one new function instead of two old ones, etc.

Thus, this should lead to an improvement in the quality of the regulatory environment for entrepreneurs and improve the business climate.

“The envisaged measures of state support, work on improving legislation and the regulatory environment will ensure the growth of SMEs over the next five years. By 2025, the number of people employed in SMEs will increase to 4 million people. The volume of output of SMEs will amount to 35 trillion tenge, with an increase in the share of SMEs in GDP to 35% by 2025. Improving the business environment will ensure Kazakhstan’s entry into the top 20 countries in the Doing Business ranking,” concluded Dalenov.

The Deputy Chair of Atameken NCE Eldar Zhumagaziev, in turn, said that the chamber since its inception has identified 624 systemic problems for entrepreneurs. Of these, 501 were resolved. The 8th reform package to improve the business climate was formed based on studies of systemic business problems. Atameken prepared over 50 amendments aimed at improving the business climate of the country. They are associated with land relations, competition, the economy, banking services.

First Deputy Prime Minister – Minister of Finance Alikhan Smailov emphasized that improving the business climate is one of the most important goals of the Government. Over five years, the share of small and medium-sized businesses in the country's GDP should increase from 29.5% to 35%.

“Until June of this year, it is necessary to pilot the Government for Business Service. Entrepreneurs should be given the opportunity to receive all assistance from the state and all services from the Government from one office. By the end of May 2020, the 9th package of reforms to improve the business climate will be prepared,” Smailov said.


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