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Kazakhstan’s economy during pandemic, recovery measures, amendments to laws and digitalization — what Irgaliyev spoke about at reporting meeting

Friday, 11 June 2021, 19:12:21

Minister of National Economy Aset Irgaliyev during the reporting meeting with the population reported on the progress department work in 2020, as well as current activities and plans for the future.

So, according to him, in 2020 the national economy was developing in the extremely difficult conditions of the coronavirus pandemic. The widespread restrictive measures have created a double shock to the global economy, both on the supply and demand sides.

“World GDP fell by 4.3%, trade — by 9%, foreign direct investment — by 42%. In these conditions, thanks to large-scale and timely anti-crisis measures of the Government, it was possible to limit the decline in the country's economy to -2.6%,” the minister of National Economy noted.

The key factor for the stability of the economy was the real sector, which grew by 2% at the end of 2020.

State support and the implementation of new approaches in the development of the construction, manufacturing and agricultural industries have provided qualitative changes in the structure of economic growth.

For the first time in 10 years of industrial policy implementation, the share of the manufacturing industry (13%) exceeded the share of the mining industry in GDP (12.4%).

Double-digit increases in production have been achieved in many manufacturing sectors.

In agriculture, the maximum growth has been achieved over the past 7 years.

Record performance has been achieved in the construction sector. In 2020, more than 15.3 million square meters were commissioned. This is 17% higher than the 2019 level. In terms of housing construction, Kazakhstan ranks first among the countries of the Commonwealth of Independent States for 2 years in a row.

Investment in fixed assets, excluding the mining industry, increased by 14.8%, which creates the basis for sustainable and high-quality economic growth in the future.

Annual inflation amounted to 7.5%, not exceeding the specified target corridor. The unemployment rate was 4.9%.

Leading rating agencies Moody’s, Fitch and Standard & Poor’s confirmed the pre-pandemic investment ratings of the Kazakh economy and raised expectations regarding the growth rate of national production in this year.

Measures to support the economy

"The implementation of 3 packages of anti-crisis measures for a total amount of 6.3 trillion tenge or 9% of GDP contributed to the preservation of socio-economic stability," Irgaliyev said.

So, in 2020, urgent measures were taken to support the population and business, operational measures to preserve socio-economic stability, and a Comprehensive Plan to Restore Economic Growth.

The instruments of concessional lending to SMEs have been significantly expanded. Increased financing of working capital. Refinancing of loans on favorable terms, as well as loan deferrals were provided.

Tax incentives have been adopted for the affected industries. The flexibility of budgetary and public administration has been ensured. Increased budgetary incentives.

As a result, 700 thousand entrepreneurs received tax breaks, 40 thousand projects of entrepreneurs were financed at a cheaper rate, 80% of borrowers from affected industries received loan deferrals.

4.6 million Kazakhstanis received payments for loss of income during the state of emergency.

Thanks to government support measures and the implementation of countercyclical macroeconomic policies, in the first 4 months of 2021, the GDP growth rate for the first time since March last year entered the positive zone.

“In January-May of this year, the rate of economic recovery accelerated to 1.6%. The economy entered the positive growth trajectory earlier than we predicted,” the head of the Ministry of National Economy of the Republic of Kazakhstan said.

In the real sector, excluding the mining industry, growth was 7.4%.

With the stabilization of the epidemiological situation, for the second month in a row, positive growth rates have been observed in the service sector.

Among the sectors of the economy, high growth was demonstrated by information and communication (growth by 11.6%), construction (by 11.3%), trade (by 6.7%), manufacturing (by 7.2%), water (by 7.6%) and electricity (5.6%), as well as agriculture (3.1%).

In the non-extractive sectors of the economy, a significant increase in investment in fixed assets at the level of 25.5% was ensured. The volume of investments increased in construction by 2.3 times, manufacturing industry - by 82%, information and communications - by 53%, agriculture - by 47%, trade - by 46%, real estate transactions - by 29% and transport - by 19%.

Sovereign credit rating of Kazakhstan

According to Asset Irgaliev, anti-crisis measures have been positively assessed by international financial and rating organizations.

Leading rating agencies Moody’s, Fitch and Standard & Poor’s confirmed the credit rating of Kazakhstan at the level of investment reliability.

According to international experts, the stability of the economy in a pandemic is ensured through the effective implementation of fiscal and monetary policies, as well as support for the economy.

“By the end of 2021, the target GDP growth in Kazakhstan is planned at a level of at least 3.5%. At the same time, taking into account the actual data on the development of the world economy, we may exceed the forecast level,” the minister informed.

Fiscal Policy

Amid the pandemic in 2020, there was an increase in budget expenditures. First of all, for social assistance and security, health care, education and housing and communal services.

The revenues of the republican budget (excluding transfers) amounted to 7 trillion tenge, of which tax revenues - 5.5 trillion tenge, non-tax revenues - 983.3 billion tenge, proceeds from the sale of fixed capital - 1.8 billion tenge. Expenditures amounted to 14.2 trillion tenge.

As part of reducing the use of funds from the National Fund, the Law "On a Guaranteed Transfer from the National Fund for 2021-2023" was adopted, which provides for a reduction in the guaranteed transfer in 2021 to 2.7 trillion tenge, in 2022 - to 2.4 trillion tenge, in 2023 - up to 2.2 trillion tenge.

“A new budgetary rule has been developed and regulated in terms of determining the size of the guaranteed transfer. In accordance with the new rule, the size of the guaranteed transfer should not exceed the projected receipts to the National Fund at the estimated price,” commented the head of the Ministry of National Economy of the Republic of Kazakhstan.

To improve budgetary discipline and involve citizens in the "budgets of public participation", the module "Budget of public participation" has been introduced on the Unified Portal of Information Resources of State Agencies.

Anyone who wants to can track the "projects" proposed by citizens in real time, indicating the statuses, the number of votes, etc. The proceeds of the corporate income tax from SMEs were transferred to the level of local budgets. In order to increase the return on budget expenditures in 2020, amendments were made to the Budget Code, providing for the reform of the budget process.

As the Minister of National Economy informed, incl. the budget process is being implemented in a new format. So, planning costs begins with the definition of strategic goals and indicators. The emphasis is on the assessment of the economic effect of the declared expenses in terms of job creation, investment attraction, tax revenues to the budget. These measures are aimed at more thrifty and economical spending of budget funds.

Proposals have been prepared and submitted for the introduction of an "extended budget" that takes into account the finances of extra-budgetary funds (SFSF, FSMS). A forecast of budget parameters and the National Fund for 2022-2024 will be formed with the development of a corresponding law.

“In order to increase the transparency and openness of the budgetary process, the ministry has begun developing a draft Concept of budgetary policy until 2030. This document will reflect the main measures of fiscal policy aimed at improving interbudgetary relations, increasing the efficiency and economic return of budget expenditures, strengthening the revenue side of the budget,” he added.

In addition, a new methodology for calculating transfers of a general nature will be developed, which will allow taking into account funds for the maintenance of newly commissioned facilities, free balances of local executive bodies, as well as applying additional industry coefficients that take into account the current state of infrastructure in the regions.

Also in this year, a draft law on budgetary legislation was developed and submitted to the Majilis of the Parliament for consideration. The main goal of the bill is to improve the quality of budget execution, the efficiency of budget risk management and improve interbudgetary relations. The law is planned to be adopted in December this year.

Tax policy

In the emergency conditions of 2020, unprecedented measures were taken to stimulate tax and financial incentives and reduce the administrative burden on business. In particular, until October 2020, the rates on taxes, social payments from the wage bill for the affected sectors of the economy were zeroed. The VAT rate has been reduced to 8% for socially significant food products.

A tax amnesty for individuals was carried out to write off the amount of penalty interest. By the end of 2020, VAT on the import of spare parts for aircraft, as well as VAT for non-residents and land tax on airport land was canceled. For the period until the end of 2020, manufacturers of excisable goods for gasoline (except for aviation) and diesel fuel sold for export are exempted from paying excise taxes.

Legal entities and individual entrepreneurs are exempted from property tax for large retail facilities, shopping and entertainment centers, cinemas, exhibitions, theaters and sports facilities. Subjects of micro and small businesses are exempt from income taxes for three years. For peasants and farms, the land tax rate for agricultural land has been reduced to zero. Import of biological assets of the agro-industrial complex, including cattle and breeding chickens, was exempted from VAT.

Until the end of 2020, the fee for the initial registration of truck tractors carrying out international road transport of goods has been excluded. Until June 1, 2020, all SMEs have been granted a deferral to pay all taxes and social payments.

“In general, all the measures taken covered about 700 thousand taxpayers in the amount of about 1 trillion tenge,” Irgaliyev summed up.

Among other things, the minister reported that in this year. in order to mitigate the effects of the pandemic and stimulate business activity, a new package of urgent tax measures was adopted as part of the updated Comprehensive Plan to Restore Economic Growth for 2021.

From April 1 to July 1 of this year a deferral was granted for the payment of taxes from the wage bill in the affected industries (118 types, the list of retail tax).

From July 1 of this year it is planned to grant the right of additional VAT offset in the amount of 70% for newly created manufacturing companies when selling their own production for a period of 2 years. It is envisaged to inform taxpayers about tax liabilities through SMS notifications.

Also from July 1 of this year, provides for the establishment of a maximum threshold for tax arrears of more than 6 MCI for the arrest of accounts.

In addition, from July 1 of this year, it is planned to exempt employees' income from personal protective equipment received from income tax.

For the catering sector, the retail tax regime will be extended at a rate of 6% (from 2023 to 2025). This measure will cover about 18,912 taxpayers in the public catering sector, making it possible to increase working capital by 24 billion tenge in 2 years.

From January 1, 2022, it is envisaged to deduct the costs of payment of remuneration for intra-group loans. It is planned to exempt from CIT incomes of small businesses, aimed at reinvestment in new fixed assets. This will increase investment and stimulate activity in the manufacturing industries.

The introduction of a special tax regime using a mobile application will simplify the registration, termination of activities and the fulfillment of tax obligations of taxpayers.

From 2022, it is planned to reduce the property tax rate and a 2-fold deduction for training costs for social entrepreneurship entities.

All of the above measures to improve tax policy are reflected in the draft law on the development of social entrepreneurship.

Investment policy

It is no secret that a key aspect of economic development is attracting investment to the country.

An unprecedented drop in investment levels and intensified trade wars exacerbate global competition for investment and markets.

“In this regard, systemic measures are being taken to launch a new investment cycle through targeted and proactive attraction of high-quality investments. New conditions are being created for investors, providing for point work with each holder of capital at every stage of the value added chain. Last year alone, 21 meetings of the Coordination Council on attracting investments and 4 meetings of the Investment Headquarters were held,” said the head of the Ministry of National Economy.

New systemic measures to improve the investment attractiveness of the country are considered.

A new instrument has been introduced - the Agreement on Investments, which will be concluded between the state and investors in order to fix the agreements.

Under the Agreement, the investor is provided with individual support measures in the form of tax and customs benefits, reimbursement of part of capital costs and in-kind grants.

In January of this year, the first Investment Agreement was signed between the Ministry of Agriculture and VALLEY KUSTO GB BV.

Investment preferences are provided for the implementation of new projects in the food and light industries. The threshold for investment in these areas has been reduced to 1 million times the MCI.

In this year in order to attract investments, it is planned to implement the following tasks.

Work will continue to conclude Investment Agreements with large companies in priority sectors of the economy (including the construction of a meat processing plant jointly with Tyson Foods).

It is planned to shorten the terms of concluding investment agreements and reduce the number of arbitration proceedings. Investment disputes will be settled out of court.

A Model Investment Agreement will be developed to conclude bilateral intergovernmental agreements on mutual protection and promotion of investments.

The implementation of investment projects in the regions will be accompanied by a comprehensive assessment of the effectiveness of existing measures.

New incentives to attract investment will be reflected in the new concept of investment policy.

In order to identify the best practices for working with investors, a rating of investment attractiveness of the regions will be introduced.

Based on the results of work in 2021, a National Investment Report will be prepared.

PPP and budget investments

Active work on the development of PPP continues. According to Aset Irgaliyev, following the results of last year, the following results were achieved.

The law provides for the procedure for the payment of compensation for investment costs. These payments will be provided in equal installments for a period of at least 5 years, which will reduce the burden on the budget.

In order to ensure long-term private investments and a balanced division of responsibilities, guarantees, risks and revenues between the public and private partners, the operating life of the PPP facility is regulated for at least 5 years (depending on the specifics of the PPP project). A “returnable PPP” tool has been introduced, which makes it possible for businesses to reimburse their costs for creating the engineering and communication infrastructure of the main object of private investment. This tool contributes to the development of industrial infrastructure, incl. in the fields of energy, housing and communal services and transport infrastructure.

In the field of budget investments, work is continuously being carried out to improve legislation. So, within the framework of the Law of December 25, 2020 "On Amendments and Additions to the Budget Code", a norm was adopted that makes it possible to implement pilot projects according to a new scheme in Nur-Sultan, Zhambyl and North Kazakhstan regions. This will reduce the planning and construction time of social facilities and reduce their cost, which will lead to savings that can be returned to the budget or reused in the framework of new public investment projects.

In this year the following activities are planned:

the overlap of PPP and Concession laws, combined with a very broad definition of PPP, leads to confusion. In this regard, it is planned to eliminate duplication, as well as to regulate the principles of applying PPP mechanisms.

With the aim of rational spending of budgetary funds and preventing the accumulation of public debt, the issue of using private financial initiative will be streamlined. The procedure for providing state support measures will be improved in order to ensure the minimum guaranteed income for the state. To do this, it is planned to divide projects according to the degree of commercial risk coverage for the state partner, which, inter alia, will lead to the settlement of the issue of guarantee of consumption. The main factor will be the availability of effective demand.

It is planned to introduce rules for the possible settlement of disputes on mediation and amicable agreement, as well as provide for arbitration for national investors.

Development of Entrepreneurship

In 2020, in order to stimulate entrepreneurial activity, the 8th package of legislative amendments to improve the business climate was adopted.

About 200 amendments have been made to 6 codes and 33 laws, providing for the simplification of procedures and a reduction in the time required for business entities to receive public services.

“These amendments allowed Kazakhstan to rise in the World Bank's Doing business rating by 3 positions, taking 25th place among 192 countries (in 2019),” the head of the Ministry of National Economy of the Republic of Kazakhstan said.

As a result of the moratorium introduced in 2020, the number of inspections of small and micro-businesses decreased by 4.6 times (from 128.4 thousand to 27.4 thousand). Inspections in relation to small and micro-businesses decreased by 7 times (from 66.2 thousand to 9.3 thousand). In order to protect the rights of entrepreneurs from illegal actions, amendments were adopted to introduce the principle of the presumption of “good faith” of entrepreneurs.

An analysis of the regulatory impact is carried out on an ongoing basis. The Interdepartmental Commission on Regulatory Policy reviewed 84 projects, refused approval of 69 projects or 82% of all submitted. The refusal to introduce new regulatory instruments made it possible to prevent business costs in the amount of 512 million tenge.

Concessional financing of SMEs

In 2020, as part of anti-crisis measures, the conditions for obtaining concessional lending were improved. The final cost of borrowed funds for entrepreneurs under the Business Road Map 2025 program was 6%. The loan amount was increased to 7 billion tenge. Industry restrictions have been removed. This allowed small and medium-sized businesses, regardless of the type of activity, to receive concessional financing.

On the instrument of guaranteeing, the amount of loans for which guarantees of the Damu Fund are issued have been increased. 50% of guarantees are provided for a loan up to 1 billion tenge, 85% - for a loan up to 360 million tenge.

In order to reduce the debt burden on loans to SMEs, the refinancing period of existing loans was increased.

Within the framework of Business Roadmap-2025, a new direction for microcrediting of micro and small businesses has also been introduced. For this category of business, subsidized loans are available at a rate of 6%. Microcredits are provided to replenish working capital up to 5 million tenge, for production needs up to 20 million tenge. There are no restrictions on all types of activities.

Under the Economy of Simple Things program, preferential loans are available at 6% per annum. The total volume of possible lending under this program has been increased to 1 trillion tenge. The list of goods and services has been significantly expanded.

At the end of 2020, within the framework of the Business Roadmap 2025 and Economy of Simple Things programs, 6,194 projects were subsidized for a total amount of loans of 746.5 billion tenge.

Guarantees were provided for 6,920 projects for the amount of loans of 261.8 billion tenge.

According to preliminary data, the share of SMEs in the economy in 2020 reached 31.6%. In 2020, SMEs produced products worth 32.7 trillion tenge.

“The number of people employed in SMEs as of January 1 of this year, amounted to 3.4 million people or 38% of the total number of people employed in the economy. In this year work on concessional lending to SMEs continues,” the Minister of National Economy informed.

For the first quarter of this year more than 13 thousand projects in the amount of 319 billion tenge received concessional financing. At the end of the year, within the framework of DKB-2025 and The Economy of Simple Things, it is planned to provide more than 24 thousand projects with concessional lending for the amount of 1.2 trillion tenge.

Support is provided in the framework of refinancing loans to SMEs in the affected sectors of the economy. For the period from March 15, 2020 to March 15, 2021, subsidies were provided for refinancing for 9 thousand projects in the amount of 475 billion tenge. In this year this list has been expanded by 145 OKED. According to the expanded list, subsidies will be paid for 2 thousand projects for the amount of a loan portfolio of 132 billion tenge.

April 1 this year The head of state was instructed to refinance loans on preferential terms in the affected sectors of the economy, with an extension of the term until July 1. Within the framework of this work, 93 OKED have been determined. It is planned to cover more than 6.7 thousand projects for the amount of loans of 425.5 billion tenge.

Result of the state programs Business Roadmap-2025 and The Economy of Simple Things for the I quarter of 2021

“According to the results of the first quarter of this year. within the framework of the programs Business Roadmap 2025 and Economy of Simple Things, 5,884 projects were subsidized for a total amount of loans of 232 billion tenge,’’ said Irgaliyev.

Guarantees were provided for 6,892 projects for the amount of loans of 87 billion tenge.

Also in this year. new measures to support SMEs were prepared together with the Atameken National Chamber of Entrepreneurs, taking into account a survey of more than 50 thousand business entities. Based on these results, the Comprehensive Plan to Restore Economic Growth for 2021 was updated. More than 60 support measures are envisaged in the following 4 areas:

1. Reducing the burden on business. This area includes the extension of the exemption from the payment of business property tax under prohibitions and restrictions, exemption from the payment of lease payments for state property and quasi-public sector property until July 1, 2021, and other measures.

2. Access to finance. Concessional refinancing of bank loans to SMEs at 145 OKED, deferrals for loans to SMEs from April 1, 2021 to June 30, 2021.

3. Access to demand markets. This block includes measures aimed at facilitating access to public procurement and procurement of the quasi-public sector, including the introduction of a mechanism to support domestic producers for minor government purchases (up to 1,000 MCI), as well as reducing the threshold for the rate of taxes paid from 4% to 3%. to expand access of SMEs to public procurement.

Regulation "from scratch"

This year the ministry has developed a bill providing for the introduction of regulation of entrepreneurial activity "from scratch».

This document takes into account the following main novelties:

1) the introduction of the Register of Mandatory Requirements, which is a database of legal regulations containing mandatory requirements for entrepreneurs. In the absence of requirements in the Register, the state body will not be able to hold entrepreneurs accountable;

2) the introduction of the Experimental Legal Regime. Special legal regime for testing new requirements in practice;

3) introduction of new forms of state control. Within the framework of the new state control, a ban was imposed on visiting businesses without taking preventive measures;

4) automation of reporting of business entities;

5) introduction of the “1 in 2 out” principle, which provides for the abolition of two existing requirements when one new one is introduced.

“At the first stage, in the period up to 2023, the requirements for four priority sectors (trade, agriculture, transport, accommodation and food services) are subject to a radical review. The revision of the requirements for the rest of the industries is planned for 2023. Thus, from 2024, a new regulatory policy in the field of entrepreneurship will work,” the minister added.

These approaches were approved on April 21 this year. at a meeting of the Supreme Council for Reforms under the President. As of today, the bill has been agreed with all state bodies, approved at a meeting of the Government and is at the stage of submission to the Mazhilis.

Adoption of new package of amendments to improve the conditions for doing business

From 2014 to 2020, fundamental reforms were carried out to improve the country's position in the Doing Business rating. As a result, over 7 years, the country's position has risen from 76th to 25th place at the end of 2019. The ambitious goal of the Government is to enter the top 20 countries in the Doing Business ranking.

To achieve these goals, a draft Law on Doing Business has been developed.

The subject of regulation of the draft Law will be such topical issues as improving legislation in the field of natural monopolies, strengthening monitoring of shared construction, regulating the sphere of advertising activities, improving housing issues, eliminating barriers preventing the development of competition, simplifying procedures for registering enterprises, connecting to the power supply system, registering property, obtaining loans, protecting minority investors, enforcing contracts. This bill is planned to be submitted to Parliament in September this year.

As part of the work to reduce the state's share in competitive sectors of the economy, the implementation of the Comprehensive Privatization Plan until 2020 was completed. 503 objects were sold for 630 billion tenge. 302 objects were reorganized and liquidated. Transferred to the new comprehensive plan - 59. These are mainly communal property objects. In order to further reduce the participation of the state in the country's economy, a new five-year Comprehensive Privatization Plan until 2025 was adopted. The new plan includes 736 organizations.

It is also planned to transfer 601 communal property objects to the competitive market. During the first two years, it is planned to implement over 500 projects.

“For companies whose shares are planned to be brought to stock markets (IPO - KTZ, KMG, Tau-Ken Samruk, Air Astana) and sold to strategic investors, pre-sale preparation will begin. The planned implementation period is 2022-2023,” the head of the ministry explained.

For the purpose of high-quality and timely execution of the Privatization Plan, the implementation rules will be improved. To strengthen control, an appropriate project office was created using the principles of the Yellow Pages. The privatization plan will be regularly updated taking into account the ongoing monitoring of the state of competition in the commodity markets.

The result of the implementation of the Privatization Plan will be to reduce the presence of the state in the economy to 14% by 2025, as well as to attract strategic investors and increase labor productivity, ensure wide access for SMEs to services, privatized companies, increase the efficiency of the quasi-public sector and ensure its compactness.

Regional policy

Increasing the economic competitiveness of regions and improving the quality of life of the population is a priority task of the ministry. Regional policy is aimed at developing infrastructure in functional urban areas, mono- and small towns, and support villages. Regional standards have been determined to ensure the basic quality of life in the regions.

In 2020, 10 billion tenge was allocated for the development of engineering infrastructure in 19 mono- and 7 small towns for the implementation of 26 projects. Work was carried out on the construction and reconstruction of engineering and communication infrastructure, roads, power lines, intra-quarter networks and improvement facilities. As a result, 670 jobs were created, 200 km of roads and engineering networks were modernized.

49 projects for the development of the outskirts of large cities were implemented for a total amount of 23.1 billion tenge (Akmola region - 5.7 billion tenge, Nur-Sultan city - 5.0 billion tenge, Almaty city - 7.7 billion tenge, Shymkent - 4.7 billion tenge).

112 km of roads, 1,000 km of engineering networks and 11 social facilities have been built.

Within the framework of the Aul - El Besigi project, 992 projects were implemented in 216 villages for a total amount of 80.6 billion tenge.

These funds were used to build and repair 1.4 thousand km of roads and more than 400 km of engineering networks, 104 schools and kindergartens, 83 cultural and sports facilities, 32 healthcare facilities (polyclinics, VA, FAP, etc.). More than 10 thousand jobs have been created.

In general, for the project "Auyl - El besigi" for two years of implementation (2019-2020), the amount of financing amounted to 124 billion tenge.

As a result, 1.9 thousand km of roads and about 1 thousand km of engineering networks, 188 schools and kindergartens, 170 cultural and sports facilities, 55 healthcare facilities (polyclinics, VA, FAP, etc.) were built and repaired. About 16 thousand jobs have been created. To increase human resources in villages under the project "With a Diploma to the Village" in 2020, 5 thousand specialists received a budget loan for housing in the amount of 20 billion tenge and 8.8 thousand specialists received lifting allowances in the amount of 2.2 billion tenge. As a result of the improvement of living conditions in the supporting villages (1,173 villages), there is an increase in the population by 231 thousand people (from 6,621.3 to 6,852.7 thousand people).

In this year 17 billion tenge is provided for the development of the engineering infrastructure of mono- and small towns for the implementation of 62 projects. About 400 km of roads and engineering networks will be modernized, more than 1,000 jobs will be created. For the development of the outskirts of large cities, 32.2 billion tenge is provided for the implementation of 51 projects. At the expense of these funds, more than 2 thousand km of roads and engineering networks will be built, as well as 12 social facilities (sports and recreation centers, schools, kindergartens and others).

Within the framework of the Auyl - El besigi project, 1,140 projects will be implemented for a total amount of 106 billion tenge. The modernization of infrastructure in 480 villages is envisaged. These funds will be used to implement 716 projects for the development of transport infrastructure (1.5 thousand km of intra-village roads), 304 projects for the modernization of social facilities (132 schools and kindergartens, 40 hospitals, outpatient clinics, etc., 132 houses of cultures, clubs and facilities sports), 120 projects for the development of housing and communal services (1.6 thousand km of engineering networks).

Under the project With a Diploma in the Village, budget loans for housing will be issued to 4.5 thousand specialists in the amount of 20 billion tenge and 8.4 thousand specialists will receive a lifting allowance.

“In general, on all projects being implemented, the Ministry conducts operational monitoring on an ongoing basis in order to take timely and effective measures. In accordance with the new System of State Planning, the department has developed a draft Plan of Territorial Development of the country until 2025,” Aset Irgaliyev said.

The main principles of territorial development for the medium term will be territorial neutrality in sectoral policies, human-centeredness (a person makes a spatial choice, while the state provides basic services), and the independence of regions in resolving issues on the ground.

The implementation of these measures is aimed at strengthening the competitiveness of the socio-economic systems of the regions by unlocking their potential.

In order to increase the efficiency of the state apparatus, a service and "person-centered" model of public administration is being formed, focused on meeting the needs of citizens.

By the decree of the Head of State (dated February 26, # 52), the Concept for the Development of Public Administration in the Republic of Kazakhstan until 2030 was approved. The concept will be implemented on the basis of a project-based approach in accordance with a specific Action Plan.

As the head of the Ministry of National Economy noted, these measures will improve the efficiency of public administration, openness and accountability of the state apparatus, as well as the professionalism of civil servants.

As part of the work on the development of local self-government in 2020, the ministry developed and submitted to the Mazhilis of the Parliament a draft law on expanding the independence and responsibility of district, city and rural levels of government. The bill is aimed at expanding the revenue base of local self-government, reducing the burden on the akims of rural districts, expanding the powers and responsibilities of local representative and executive bodies.

This year, laws were developed and adopted to introduce direct elections of akims of cities of district significance, villages, townships, rural districts. At the moment, direct elections in the country are legally regulated, with a clear procedure for nominating, registering a candidate, holding elections and taking office of akims of cities of district significance, villages, townships, rural districts.

The implementation of the laws will increase the activity of citizens and their confidence in the authorities, accountability and responsiveness of the rural akim, as well as political competition in the country. A new model for the development of local self-government until 2030 is also being formed. The main approaches, taking into account the proposals of the public, will be reflected in the draft Concept for the development of LSG. Its implementation is planned in two stages: Stage I - 2021-2024. and stage II - 2025-2030.

It is planned to ensure a clear delineation of powers between the levels of government and LSG with further improvement of LSG bodies.

Tariff policy

The following results have been achieved in the area of ​​tariff policy.

At the beginning of 2021, tariffs for the population (comparison January 2020 to January 2021) have been reduced on average by 0.4%, incl. for services:

- heat supply by 3.75%;

- water supply by 0.34%;

- wastewater disposal by 1.37%.

At the same time, tariffs for electricity supply services increased by 3.92%.

In 2020, for the period of emergency and quarantine, tariffs were reduced by an average of 7.4% (including a decrease in water supply services by 8%, wastewater disposal by 9.3% and heat supply by 7.6%, electricity supply by 5%). %). As a result, the aggregate contribution to inflation from tariffs for regulated services for 2020 amounted to 0.11%. The total savings for the population amounted to about 1 billion tenge in one month.

Also under the special control of the ministry is the execution of the approved tariff estimates and investment programs. In 2020, for failure to fulfill obligations by natural monopoly entities, measures were taken to introduce temporary compensating tariffs for housing and communal services for a total of 14.5 billion tenge.

In this year the implementation of the tariff policy will be aimed at maintaining the corridor of the contribution to inflation from tariffs for regulated services of natural monopoly entities, as well as preventing unreasonable growth in tariffs for utilities.

Also, according to Irgaliyev, all types of purchases and reporting of natural monopoly entities will be transferred to electronic format.

Monitoring will be carried out on an ongoing basis with the aim of transferring ownerless networks and facilities built at the expense of budgetary funds in the communal sector, as well as gas transmission and gas distribution systems in trust management to subjects of natural monopolies.

The improvement of the legal framework in the field of natural monopolies will continue by introducing amendments and additions to the Law "On Natural Monopolies" and to the Rules for the Formation of Tariffs. Together with the regional akimats, a comprehensive analysis of allocated subsidies from the budget will be carried out, aimed at reducing the cost part of the tariff for natural monopolies in the field of heat supply.

“This work will also be carried out on borrowed loans from international organizations and budget loans in the housing sector in order to determine their possible impact on the tariff when the period of principal debt repayment comes and develop proposals for refinancing foreign currency loans,” he said.

International cooperation in 2020-2021

Within the framework of international economic cooperation, the Ministry has done the following work.

Meetings of intergovernmental commissions were held to expand cooperation in a number of industries.

Memorandums were signed with Uzbekistan and Macedonia. Through multilateral cooperation, took part in a number of meetings within the EAEU, CIS, SCO.

The ratification of the Agreement on the principles of tax policy in the field of excise taxes on tobacco products of the EAEU Member States has begun.

In this year within the framework of international economic cooperation, work will continue to promote Kazakhstan's interests within the framework of the Intergovernmental Commissions (the MNE oversees the IGC with Croatia, North Macedonia, Bulgaria, Serbia, Indonesia).

It is planned to implement the Program of bilateral economic and cross-border cooperation with Russia, as well as the signing of international agreements on economic cooperation with Portugal, Montenegro, Bulgaria and other countries.

In addition, in the framework of cooperation with the Organization for Economic Cooperation and Development, cooperation with 37 working bodies continues.

As the minister informed, the ongoing work on joining the new legal instruments will positively affect the promotion of the country's interests.

As part of interaction with international financial organizations, a new Cooperation Program until 2025 will be adopted.

In general, work on international economic cooperation will be aimed at promoting Kazakhstani initiatives.

Among other things, as the Minister of National Economy said, the main priorities of the ministry's work this year are are the development of entrepreneurship, the launch of a new investment cycle, increasing the efficiency of government spending and fiscal policy.

“In order to activate private entrepreneurship, work will continue to develop public-private partnerships, competition, and reduce the share of state participation in the economy. Also important tasks are the development of regions, increasing labor productivity, improving public administration and strengthening international cooperation,” he summed up.

Answering the question of whether the number of business inspections by akimats and regional SESs has decreased, Asset Irgaliyev said that the moratorium on business inspections introduced by the President of the country in 2019 significantly reduced the number of inspections by government agencies.

“According to the Committee on Legal Statistics and Special Accounts, in 2020 the number of registered inspections of small and micro businesses decreased by 7 times compared to 2019. Preventive measures with site visits decreased by 1.4 times. All this testifies to the positive dynamics of the implementation of the Decree of the Head of State,” he said.

He also added that during the period of the pandemic and quarantine, forced restrictive measures were introduced against businesses, enterprises and organizations. This mainly affected the service sector - the restaurant business, catering, the activities of retail facilities.

All restrictions were introduced in order to protect and protect the health of the population. Therefore, inspections and preventive visits during this period were carried out in relation to catering, trading platforms solely for the purpose of observing sanitary and epidemiological supervision during the quarantine period.

“Unfortunately, facts were revealed when business entities violated the introduced quarantine regime and did not follow the established requirements during the period of quarantine restrictions,” he stressed.

He also added that the Decree of the Head of State (subparagraph 1) of paragraph 1) provides for exceptions for inspections. These checks are aimed at preventing or eliminating violations that potentially pose a massive threat to the life and health of the population, the environment, the rule of law and public order.

Also, citizens were interested in the question of whether support measures for business will be continued this year. To this Asset Irgaliev replied that the ministry is currently developing an additional package of new urgent measures to support business.

Thus, the new package will provide for the following measures:

1) reduction of VAT by 70% for new manufacturing enterprises;

2) exemption from CIT of profits that will be reinvested in the development of production;

3) the extension from 2023 of the retail tax regime for SMEs in the catering sector;

4) simplified registration of individual entrepreneurs through a free mobile application;

5) cancellation of the restriction on deduction for CIT of remuneration for intragroup loans;

6) exemption from IIT of income of business workers in the form of personal protective equipment received;

7) the establishment of the maximum threshold for tax arrears, below which measures for the arrest of accounts are not applied. In the amount of 6 MCI - in order to suspend debit transactions;

8) introduction of a norm for the quick removal of restrictions on current accounts.

"Also, on behalf of the Head of State, a deferral is introduced for the payment of all taxes from the payroll for SMEs in the affected industries from April 1 to July 1 of this year," the Minister of National Economy said in conclusion.


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