Baku, Azerbaijan, Nov. 21
By Elena Kosolapova - Trend:
The Kazakh Senate (parliament's upper chamber) passed a law increasing taxes on luxury goods, transport and property and excise taxes on tobacco and alcohol, Novosti-Kazakhstan reported on November 21.
The controversial law has roused urgent discussions in Kazakh forums.
"We have too big gap between the rich and the poor. Maybe this measure will bring them closer to each other," one guest user said at Tengrinews.kz website.
"You are right, Nursultan Abishevich (Nazarbayev). Millionaires should pay more," another user wrote.
However not all citizens support the initiative.
"The law is uncompromising and will create a base for tax evasion and thriving corruption," one of the website's users believes.
The opinions on the increase of excise taxes on tobacco and alcohol are also divided.
"Let's increase the excise taxes on alcohol. Maybe we will drink less," one of Tengrinews.kz proposes.
"I am for a fivefold increase in alcohol prices. The government acts rightly, to stop ruining your health," the other user said.
"It is a sin to drink alcohol," one more user added.
Meanwhile opponents of the new law contend that high excise taxes on alcohol will entail an increase in counterfeit alcohol production.
The excise rates for strong alcoholic beverages will be increased from 500 tenges ($3.3) to 1000 tenges ($6.6) in 2014, up to 1200 tenges ($7.8) in 2015 and up to 1600 tenges ($10.5) in 2016.
The issue of increasing the rates on low alcohol products is proposed for consideration in 2014.
The rate of excise duty on cigarettes will be increased from 3000 tenges (about $20) to 3900 tenges ($25.5) in 2015 and up to 5000 tenges ($32.7) in 2016.
With regard to the tax on luxury properties, the tax on real property worth over $1 million will be increased threefold.
The tax rate for cars with a 4000-5000 cubic centimetre engine capacity will be increased from the 117 to 130 monthly indexes (one monthly index = 1731 tenge or $11). The tax rate for cars with an engine capacity exceeding 5000 cubic centimetres will reach 200 monthly indexes. The new tax rate will be applied to vehicles purchased after January 1, 2014.
According to Kazakhstan's official statements, a gradual increase in excise taxes on strong alcohol and tobacco products is envisaged in order to discourage consumption of these socially harmful goods. Meanwhile taxes on luxury goods will swell the budget income and make the rich people direct their wealth towards the country's development.
The documents are being submitted to Kazakh President Nursultan Nazarbayev for signing. The tax increases were proposed by the president himself.
"It is necessary to impose indirect taxes on luxury goods, expensive cars and all sorts of evil passions such as alcohol and cigarettes and so on," the president said at the XV Congress of the Nur Otan Party, on October 18.
"We have created a class of wealthy citizens. This is good as it was our goal, deliberate policy. Now when the wealthy class expands, they can and should contribute towards social responsibility. This is common practice all over the world. Meanwhile in our country a millionaire and a worker pay the same 10 per cent income tax. We should think about it," he said.