Small business – key to boosting Kazakhstan’s trade, service sectors

Stimulation of the development of micro and small businesses can in the long term lead to the development of economy sectors such as services, trade and production, the Head of the Analytics Center of Association of Financiers of Kazakhstan Roman Margatskiy told Trend.

Recently, President of Kazakhstan Kassym-Jomart Tokayev has mandated to temporarily exempt local ventures of micro and small business from paying taxes related to main activities for three years.

According to Margatskiy, the level of business development directly determines the level of overall country’s development.

“The main idea is to balance interests of the government and the business, provision of optimal conditions to entrepreneurship and increase of competitiveness of small business. Overall exemption of micro and small business from paying taxes related to main activities is more aimed at stimulation of the sectors development, which is mainly concentrated around the services,” he said.

He added that just as in development of any economy sector, the formation stage is very important. This is why provision of business with such concessions are extremely positive for the development of all economy sectors, both in short and long term.

Furthermore, according to the analyst, exemption of business from taxes will not have a significant impact on revenue to the country’s budget.

“The share of taxes related to main activities amounted to less than two percent of the total value of tax in 2018, which is not significant and could be leveled by other income items in the short term,” Margatskiy noted.

The analyst further added that the main goal of the policy in area of small entrepreneurship state support is in giving it the investment focus.

“Stimulation of micro and small business development in the short term could lead to the development of economy sectors such as services, trade, manufacturing, which in turn will provide for increase of employment rate, decrease of volume of shadow cash turnover and development of financial sector,” Margatskiy commented.

He noted that micro and small business stimulates development of competitiveness and integration of new technologies, improves manufacturing efficiency in developed countries.

“Efficiency of country’s entire economy depends on the success of micro, small and medium business. In comparison, the share of small business in the GDP of developed countries such as the USA, Japan, Germany is on average 54 percent, and the share in total employment is 60 percent,” he concluded.