Republic of Kazakhstan: Selected Issues

International Monetary Fund

No 2020/038, IMF Staff Country Reports from International Monetary Fund

Abstract: This Selected Issues paper conducts a review of taxes on labor in Kazakhstan, which, despite the current relatively low level of collections, have the potential to become an important source of non-oil fiscal revenue. This paper focuses on one group of non-oil taxes, personal income tax and other taxes on labor, and reviews their effective burden, progressivity, and efficiency. These taxes are found to have limited responsiveness to oil-sector fluctuations, and thus help enhance the resilience of public finance to oil shocks. The existing labor tax system is characterized by a low, flat headline rate, limited progressivity except at the lower end of household income distribution due to deduction of the minimum wage, and a relatively high tax burden mainly born by the formal sector. Having a more equitable and efficient labor tax system would involve a targeted strategy for deductions and exemptions, expanding the tax base, and continuing to improve tax design, administration, and collection enforcement.

Keywords: ISCR; CR; rate; PIT rate; infrastructure investment; firm performance; infrastructure project; tax burden; PIT progressive; investment inefficiency; Budget planning and preparation; Fiscal rules; Personal income tax; Fiscal risks; Income; Global; Australia and New Zealand; Africa; Personal income (search for similar items in EconPapers)
Pages: 69
Date: 2020-02-07
New Economics Papers: this item is included in nep-cis and nep-mac
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