According to the national statistics bureau, the number of registered individual entrepreneurs in the country decreased by 2.4% over the month. However, throughout 2023, the number of entrepreneurs increased by 8.5%. The editorial team of "Voice of the People" decided to find out how the decline in individual entrepreneurship is related to the introduction of universal income declaration. Could this mean that entrepreneurs will move to the shadow business or close their projects?
"In December, the number of registered individual entrepreneurs compared to November 2023 decreased by 2.4% and amounted to 1,719 thousand entities," the agency's statistics state.
The number of entrepreneurs in December also decreased - by 1.9% compared to November 2023. Currently, there are over 1.7 million registered individual entrepreneurs and more than 500 thousand legal entities in Kazakhstan. The overall annual figure showed growth. Over the previous year, the number of individual entrepreneurs increased by 8.5%, while the number of active legal entities grew by 5.5%.
According to economist Askar Kysykov, the introduction of the declaration will not affect the number of entrepreneurs.
"I don't think that due to universal declaration there will be fewer entrepreneurs or that they will move to the shadow business. The main reasons for the development of the shadow sector are the complexity of tax regimes or illegal activities that cannot be conducted legally," he replied.
At the same time, bureaucracy may temper the enthusiasm of businessmen.
"After studying the declaration, I realized that it is not so easy to fill out. In the future, an ordinary Kazakhstani will find it difficult to complete it. Even for me, with a higher economic education, it was hard to understand some sections. The format of the declaration itself requires improvement in the future. But overall, universal declaration has been postponed for many years and, in principle, this is the first step towards building a society of taxpayers in Kazakhstan," Askar Kysykov told the editorial team of "Voice of the People."
He added that tax authorities should assist businesses – providing services so that they are not afraid to pay taxes and that it is simple and convenient. According to the economist, the country needs to increase taxpayer coverage through digitalization and new services. The state, in the economist's opinion, should fulfill its part of the deal: effectively manage the expenditure part of the incoming budget to the treasury.
"For several years now, we have been promised optimization and transparency of the budget. It is clear that there are many ineffective expenditures in the budget. Therefore, there is a big question for the state: 'How effectively are the taxes collected from our citizens being spent?'. That is, if the state requires everyone to pay taxes, then it should work to ensure that the collected money is spent effectively," the economist added in response to a question about the effectiveness of the declaration.
By law, citizens who are the heads, founders of legal entities, individual entrepreneurs, or their spouses must submit a declaration of assets and liabilities for 2023. By 2025, the declaration will become mandatory for all Kazakhstanis.
Entrepreneur Aydana Seitzhanova notes that news about the declaration still raises some concerns among entrepreneurs. If taxes increase, small and medium-sized business owners will have to raise the prices of their services or goods.
"The declaration is inevitable and there is no need to be afraid of it. Just as businesses opened in the country, they will continue to open. The only thing that confuses entrepreneurs today is the fines. In America, universal declaration is considered a successful practice, but the people were prepared for it for a long time – free training was organized, etc. I hope that this declaration will work as intended, not against the people," says the owner of an individual entrepreneur.
Let us remind you that since 2021, Kazakhstan has been gradually introducing new categories of taxpayers into the Universal Declaration system. The first to submit declarations were political and state officials, deputies, top managers of national companies, and their spouses.
However, their declarations are still not available in the public domain. The anti-corruption agency promised to declassify these documents in 2025.