Kazakhstan simplifies self-employed workers’ registration
Single Total Payment’s introduction provides for a simplified procedure for registration with the tax authorities, which will speed up the legalization of the activities of the informal workers.
Expert roundtable discussion with participation of Minister of Labor and Social Protection of Population of Kazakhstan Madina Abylkassymova was devoted to the introduction of Single Total Payment (STP).
The Labor Minister announced it is planned to introduce the STP since January 1, 2019, in Kazakhstan.
As a result of STP introduction it is planned to formalize the activity of 500 thousand people from among the informal workers, and also the flow of 65.4 thousand payers from the existing tax regimes on the basis of a patent and a simplified declaration.
According to the ministry’s data to the results for the second quarter of 2018 shows the number of employed population was 8.6 million people, including 6.5 million employees and 2,063,000 self-employed.
In the Republic’s economy, 16% of the total number of employed was informally employed (1376 thousand people) among them about 800 thousand people are hired workers who work without drawing up employment contracts and 588 thousand are self-employed.
The current situation shows the informal factors are facilitated by such factors as the complicated procedure of registration and withdrawal from the tax authorities, the existence of numerous payment systems and the difficulty in determining the tax regime.
Thus, the introduction of the Single Total Payment provides for a simplified procedure for registration with the tax authorities, which will accelerate the legalization of the activities of the informal workers.
Individuals engaged in activities for the purpose of generating income, subject to certain conditions will be covered by STP.
Thus, individuals should not use the labour of hired workers, perform work, provide services for individuals, sell agricultural products from the exploitation of personal subsidiary plots for consumption by individuals.
In turn, the STP will not apply to individuals providing services on the territory of commercial real estate objects, including retail facilities, persons renting (property hiring) property, except for the home, individuals engaged in private practice, foreigners and stateless persons, with the exception of oralmans, persons who have state registration as an individual entrepreneur.
At the same time, the marginal income for a calendar year should not exceed 100 minimum wages of MW: 2,296,800 a year tenge, 247,4 thousand tenge per month in 2019.
Thus, the STP is extended for the main categories of self-employed workers (employees of personal part-time farming, unpaid family workers, entrepreneurs with a small turnover of less than 100 MW per year and without hired workers).
The developers suppose the STP introduction will give an impetus to the formalization of the above categories and will allow them to be involved in the social insurance and pensions system, reduce the financial burden and simplify the registration, payment and administration processes.
Senior partner of CSI Olzhas Khudaibergenov made a comment during the discussion.
Somewhere slightly more than 60% of the population in the country do not pay taxes at all. Our main task is to bring people to the accounting field. The STP has three positive characteristics. Firstly, it is voluntary enough; secondly, it is easy and affordable, it is even designed for people who do not understand accounting, and thirdly, it is a low tax burden. The CAP applies only to natural persons, legal entities can’t use this mechanism and is aimed at that category of people who do not pay anything at all, " Olzhas Khudaibergenov commented.