Kazakhstan needs VAT reform - Tokayev
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Kazakhstan needs to drastically improve efficiency of its budgetary and tax policies. In the past five years, the volume of budget deficit exceeded 11 trillion tenge, which proves that the Government is still challenged to manage budget effectively and forecast budget parameters in a quality manner. This is what President Kassym-Jomart Tokayev said at Wednesday extended meeting of the newly-formed Cabinet, Kazinform News Agency reports.
In his words, in 2023, the Ministry of Finance achieved its revenue target "mostly through the current year taxes".
Budgetary problems were solved by means of withdrawal of working capital from business, he stressed.
Another problem is the order of budget distribution, which is not oriented on economic activity stimulation. Finances are spent on current tasks, while strategic goals go into the background, the President said.
He stressed that the Government has to set clear priorities of expenditures, to ensure maximum economic return.
Addressing the Cabinet members, the President expressed displeasure with the new Tax Code being drafted now.
He emphasized that the new Tax Code should ensure a reasonable balance between creation of comfortable climate for investors and maintaining necessary level of budget revenues.
Business community believes that the document [new Tax Code - edit] is aimed at raising tax rates. Raising the VAT from 12% to 16% is not a panacea. The VAT needs to be reformed. Experts rightfully argue that raising the VAT may lead to inflation surge, increase the share of shadow economy, and decrease investment attractiveness of the country. I have to state that the work on the development of the new Tax Code does not meet my expectations, he said.
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Kazakhstan's economy to slow down in 2024, then accelerate in 2025 - ADB
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The Asian Development Bank (ADB) has marginally revised downwards its economic growth outlook for Kazakhstan in 2024, following weaker expansion in services in the first half of the year coupled with lower oil outputs, massive floods, and a slowdown in investment, ADB reports.
The Asian Development Outlook (ADO) September 2024, the latest edition of ADB’s flagship publication, projects 3.6% growth of Kazakhstan’s gross domestic product (GDP) this year, slightly lower than the bank’s previous forecast of 3.8% in April 2024. The Central Asian nation’s economic growth is expected to accelerate to 5.1% in 2025.
In the first half of 2024, tax revenue collection declined as receipts from oil duty and value added tax were lower compared to the same period in 2023. The decline in tax collection was offset by higher transfers from the sovereign wealth fund, the National Fund of the Republic of Kazakhstan (NFRK), with the government utilizing three-quarters of planned annual transfers in the period. This partially led to the national currency appreciating as the central bank converted the NFRK foreign currency receipts to tenge to meet the government transfer requests.
While the economic growth prospects for Kazakhstan’s look positive in the medium term, its fiscal challenges need to be addressed to ensure sustainable and inclusive economic growth," said ADB Country Director for Kazakhstan Utsav Kumar.
Average inflation slowed to 8.9% in the first 7 months of 2024 down from 17.2% last year. Inflation is projected to slow further to 6.1% in 2025, reflecting tight monetary policy and a stable exchange rate enabled by substantial foreign reserves and commodity export earnings. The combined reserves in the NFRK and the central bank surpassed $100 billion as of June 2024.
Kazakhstan joined ADB in 1994. ADB has since committed about $7 billion in loans to the government and private sector, grants, and technical assistance.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members-49 from the region.
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Olzhas Bektenov and First Deputy Prime Minister of Georgia Levan Davitashvili discuss trade and economic cooperation issues
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Prime Minister of Kazakhstan Olzhas Bektenov met with First Deputy Minister - Minister of Economy and Sustainable Development of Georgia Levan Davitashvili, who arrived in Astana to participate in the 12th meeting of the Kazakhstan-Georgia Intergovernmental Commission on Trade and Economic Cooperation, primeminister.kz reports.
The issues of interaction in the spheres of transport and logistics, agro-industrial complex, energy, tourism, aviation industry, as well as strengthening cultural and humanitarian ties were considered.
Georgia is an important and reliable partner in the South Caucasus. In the first quarter of this year, Georgian investors invested $88.5 million in Kazakhstan's economy, while the total investment volume has exceeded $500 million over 10 years.
The parties emphasised the prospects in the transit and transport sphere. Major transcontinental transport corridors pass through the territories of the two countries as the shortest routes from Europe to China and South-East Asia.
Kazakhstan and Georgia are actively co-operating within the framework of the development of the Trans-Caspian international transport route. Cargo transshipment along this route grew by 65% last year and by 69% in the first 8 months of this year, reaching 2.9 million tonnes.
The Head of State pays great attention to the development of the Middle Corridor, and we aim to increase the volume of traffic along this route to 10 million tonnes of cargo. For this purpose, the Government is taking consistent measures to improve transit conditions," Olzhas Bektenov stressed.
Head of the Government of the Republic of Kazakhstan noted the importance of continuing joint work on establishing competitive tariff conditions, reducing delivery time and increasing the volume of transportations along the TMTM route, including the line Baku - Tbilisi - Kars. Along with this, the need for active digitalisation of the transport corridor, which will increase its attractiveness for international carriers.
In turn, Levan Davitashvili expressed interest in strengthening cooperation with Kazakhstan and noted the special role of the Intergovernmental Commission, which is called to give a new impetus to the development of bilateral relations.
The participants of the meeting confirmed the intention to continue multidimensional work to ensure the dynamic development of trade and economic partnership.
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Olzhas Bektenov and Deputy Managing Director of the IMF Bo Li discuss financial and economic cooperation issues
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The Prime Minister of Kazakhstan Olzhas Bektenov met with the Deputy Managing Director of the International Monetary Fund Bo Li, primeminister.kz reports.
The meeting focused on cooperating in the financial and economic areas.
Kazakhstan has been a member of the IMF since 1992. Long-term partnership with the Fund is important to ensure economic stability of the country and quality sustainable growth of the national economy.
The participants of the meeting emphasized the strategic nature of cooperation between Kazakhstan and the IMF.
Positive results of joint work on structural reforms, development of fiscal policy and financial market of Kazakhstan testify to the high importance of cooperation.
The opening of the IMF's Regional Capacity Development Center for the Caucasus, Central Asia, and Mongolia in Almaty last year gave new impetus to bilateral and regional dialogue on maintaining international financial stability.
It was noted that as a result of the systematic policy of the head of state on comprehensive modernization of the economy on September 9 this year Moody's rating agency upgraded Kazakhstan's sovereign rating to Baa1 with stable outlook.
The assigned rating is the highest for all years of the country's independence, and confirms the continued improvement of the institutional environment and the sustainability of the pace of economic diversification.
Olzhas Bektenov emphasized that the Government of Kazakhstan, together with the National Bank and the Agency for Development and Regulation of the Financial Market, intends to pursue a consistent policy aimed at achieving high-quality economic growth.
Ongoing reforms aim to further improve the effectiveness of fiscal policy, financial accountability and tax administration.
In turn, IMF Deputy Managing Director Bo Li noted that the Fund is committed to continuing the strong and constructive partnership with Kazakhstan aimed at growing Kazakhstan's economy and enhancing the welfare of its people.
To this end, regular policy advice on priority reforms and technical assistance provided by the IMF to the government agencies contribute to strengthening the institutional frameworks and private sector development.
At the end of the meeting, the parties confirmed their intention to strengthen the partnership across the entire spectrum of cooperation.
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Ant Group sees 300% rise in international users adopting mobile payment in China in 2024
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Ant Group today announced the number of international visitors who have used its mobile payment services in China quadrupled over the past six months, following the launch of the International Consumer Friendly Zones program in March that has now expanded to 70 Chinese cities, Ant Group reports.
Speaking at the 2024 INCLUSION·Conference on the Bund, Cyril Han, President and CFO of Ant Group, said transaction volumes of inbound tourists using Ant-supported mobile payment services grew by sixfold between March and August 2024 year-on-year. This surge has created significant business opportunities for local merchants. The number of Chinese merchants regularly servicing overseas travelers through the company’s mobile payment solutions have tripled during the same period.
Since 2019, Ant Group, with the support of the People’s Bank of China, has collaborated with international card networks and overseas digital wallets to drive innovation in inbound mobile payments, a collective effort known as the China Payment Facilitation Partnership. During the 2023 Hangzhou Asian Games, Ant introduced two mobile payment solutions for international visitors, and the number of supported international payment partners has continued to grow since then.
Through Alipay+, the cross-border mobile payment and digitalization solutions operated by Ant International, international visitors can pay with their home e-wallets across China. Alipay+ now supports 13 leading e-wallets and payment apps in Asia for use across an 80-million-strong merchant network in China, an increase from 10 payment partners in 2023. Those include AlipayHK (Hong Kong SAR, China), Kaspi.kz (Kazakhstan), MPay (Macao SAR, China), Touch 'n Go eWallet (Malaysia), Hipay (Mongolia), NayaPay (Pakistan), Changi Pay (Singapore), OCBC Digital (Singapore), Kakao Pay (South Korea), Naver Pay (South Korea), Toss Pay (South Korea), TrueMoney (Thailand), and GCash (the Philippines).
The other option allows visitors to bind major international bank cards - Visa, Mastercard, JCB, Discover®, Diners Club International, and UnionPay International - to the Alipay app to access to a rich array of local services, including shopping, dining, ride-hailing and public transportation, without needing a Chinese-mainland bank account or phone number. The number of card networks supported on Alipay is expected to increase to 7 as American Express has recently received an approval for an inbound wallet solution in China.
In addition to increased payment volumes, inbound tourists are embracing value-added services available on digital wallets for more immersive local experience. The number of Alipay+ partner wallet users redeeming digital coupons increased by 105% quarter-on-quarter over the past six months. Alipay+ wallet partners also introduced over 160 China-travel mini-programs to help visitors access services such as luggage storage, power-bank rentals, massage chairs, and even claw machines.
Inbound tourism to China is experiencing a robust recovery, driven by a combination of government policies and private-sector initiatives like the International Consumer Friendly Zones program. These efforts have significantly alleviated challenges such as visa requirements, payment accessibility, and transportation capacity, making it easier for people to explore China," says Liu Yufeng, Deputy Secretary-General, World Tourism Alliance, a China-based international tourism organization that currently has 253 members from 45 countries and regions.
Mohammed Badi, President of Global Network Services, American Express, said "American Express and Alipay have discussed potential areas of collaboration to deepen our partnership and we recently received approval from the State Administration of Foreign Exchange for an inbound wallet solution, which we very much appreciate. Both American Express and Alipay will share more information with our customers, stay tuned."
OCBC was the first Singaporean bank to offer global cross-border payment services through our own app via Alipay+, enabling our Singaporean customers to make payments easily at millions of merchants within Alipay+'s global ecosystem, including those in the Chinese mainland. As Alipay+ continues to expand its global services, we will keep improving our products and enhancing user experience, striving to gain recognition in even broader markets," says Ang Eng Siong, Chief Executive Officer, OCBC China.
In first half of 2024, the number of users utilizing Alipay+ via the OCBC app doubled on year, with the transaction amount nearly tripling, said Mr. Siong.
We've been encouraged by the substantial growth in mobile payment adoption among international visitors and the resulting boost in transactions for our merchant partners, especially since the launch of the International Consumer Friendly Zones program. Ant Group is committed to further elevating inbound travel experience through technological innovation and partnerships," says, Cyril Han Xinyi, President and CFO, Ant Group.
Ant Group alongside its partners launched the International Consumer Friendly Zones program in Beijing in March 2024 to improve digital payment options' accessibility and ease of use for international travelers and has since expanded it to 70 cities, including Shanghai, Guangzhou, Shenzhen, Chongqing, and Chengdu. The program also covers 500 tourist hot spots, such as the Bund in Shanghai and Hangzhou’s famed West Lake.
At the main forum of the Conference, Peng Yang, CEO of Ant International, noted the impact of digital innovations on opening low-cost growth paths for SMEs across main businesses of the Singapore-based company. "Alipay+ has established a global network of 90 million merchant partners across 57 markets to make global travel seamless; while WorldFirst and Antom offer secure and fast digital payment solutions tailored to the needs of SMEs, global merchants and platforms. We look forward to expanding our partnership for digitalization and inclusion in all regions."
About Ant Group
Ant Group traces its roots back to Alipay, which was established in 2004 to create trust between online sellers and buyers. Over the years, Ant Group has grown to become one of the world's leading open Internet platforms. Through technological innovation, Ant Group supports its partners in providing inclusive, convenient digital life and digital financial services to consumers and SMEs. In addition, it has been introducing new technologies and products to support the digital transformation of industries and facilitate industrial collaboration. Working together with global partners, the company enables merchants and consumers to make and receive payments and remit around the world.
About Ant International
Headquartered in Singapore, Ant International powers the future of global commerce with digital innovation for everyone and every business to thrive. In close collaboration with partners, we support merchants of all sizes worldwide to realize their growth aspirations through a comprehensive range of tech-driven digital payment and financial services solutions.
About Alipay+
Alipay+ is a suite of cross-border digital payment, marketing and digitalization solutions that help connect global merchants to consumers. Consumers enjoy seamless payment and a broad choice of deals using their preferred payment methods while travelling abroad. Small and medium-sized businesses may use Alipay+ digital tools to enhance efficiency and achieve omni-channel growth.
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Olzhas Bektenov and Deputy Prime Minister of Thailand discuss prospects for trade and economic and investment cooperation
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During the meeting of Prime Minister of the Republic of Kazakhstan Olzhas Bektenov with Deputy Prime Minister of the Kingdom of Thailand Phumtham Wechayachai discussed key issues of bilateral relations concerning the development of trade, cooperation in tourism and sports, as well as prospects for the implementation of joint investment projects and increasing exports of Kazakh products, primeminister.kz reports.
In 2023, trade turnover between Kazakhstan and Thailand reached $367 million. The parties considered the possibility of expanding the range of domestic agro-industrial goods supplied to the Kingdom. In particular, Kazakhstan is interested in exporting meat, fruits and vegetables, cereals, flour products, vegetable oils and other agro-industrial products.
On the instructions of the Head of State, we are developing a national commodity distribution system with an appropriate infrastructure for storage and distribution of agricultural products. This will create the necessary conditions for the formation of an agro-food hub in our country. Deepening cooperation between Kazakhstan and Thailand in this matter is mutually beneficial and promising," Olzhas Bektenov stressed, noting the wide opportunities of Kazakhstan and Thailand in the implementation of relevant investment projects.
In turn, Phumtham Wechayachai expressed confidence in strengthening trade and economic ties between Thailand and Kazakhstan.
This morning we signed an agreement on economic interaction. I believe that this document contributes to the expansion of co-operation in various fields, including trade, economy and investment," Phumtham Wechayachai said.
During the meeting the positive dynamics of development of relations in the sphere of tourism, including granting by the Government of Thailand visa-free regime for citizens of Kazakhstan was noted. Opening of the Consular office in Phuket will provide the necessary support for Kazakhstani citizens staying in Thailand.
In addition, the possibility of using the transit potential of Kazakhstan in the context of the development of the Trans-Caspian route was discussed.
At the end of the meeting, the parties expressed their intentions to deepen economic co-operation between the two countries.
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