In his new Address to the people of Kazakhstan titled ‘Fair Kazakhstan: Law and Order, Economic Growth, Public Optimism’, President K.K.Tokayev, firmly adhering to the strategic course of building a just society in the country, outlined several concrete practical measures aimed at further modernizing the economy, enhancing the welfare of citizens, and ensuring their rights and security.
The vision of a Fair Kazakhstan, outlined by the Head of State, is crystal clear: it is a society of equal opportunities for everyone, where there is no place for political, economic, or social inequality.
However, as we know, so many men, so many minds, and each individual has their understanding of justice and a just society. Recognizing that the success of reforms largely depends on societal unity, the President seeks to bring everyone to a common understanding, step by step, filling the declared concept of Fair Kazakhstan with specific content. In other words, to collaborate effectively—and avoid the fate of the swan, pike, and crayfish—it is imperative to at least suggest and converse about the same topics.
That is the overarching theme of the Address, constructing the image of a just Kazakhstan through the prism of concrete reforms. Two of these reforms stand out, as they vividly illustrate the comprehensive, systematic nature of the building blocks that will form the foundation of a Fair Kazakhstan.
First of all, it is the reform of the tax system, one of the cornerstones of which is the luxury tax. Currently, we have a flat individual income tax rate of 10%, which is the lowest in the CIS and among the lowest in the world. Under this system, oligarchs and the poor bear the same tax burden. The new Tax Code proposes a progressive income tax scale, where the tax rate is linked to the amount of income. In other words, citizens with higher incomes will pay more tax, while those with lower incomes will pay less.
This is a widely practised approach in most countries around the world. For example, in the United Kingdom, Germany, and France, a lower threshold of annual income is established that is not subject to tax, and as income increases, the tax rate rises to 45%. In China, the progressive tax scale ranges from 3% to 45%, in Japan - from 5% to 45%, in Turkey - from 15% to 40%, etc.
Finland and Switzerland have gone even further. In these countries, fines for traffic violations are calculated as a percentage of citizens' income rather than a fixed amount, as is done in our country. This means that for the same offence, wealthy individuals pay larger fines than those with lower incomes. For instance, a record-breaking $1 million fine for speeding was imposed in Switzerland in 2010(!).
According to the forthcoming Tax Code, a differentiated approach to transport tax is also envisaged. Now, when calculating it, the car's service life will also be taken into account. Depending on the year of manufacture of the car, the following correction factors will be used: up to 10 years - 1, from 10 to 20 years - 0.7, and over 20 years - 0.5.
Additionally, there are plans to introduce an extra excise tax on luxury items, such as high-end real estate, yachts, private jets, luxury cars, and expensive types of alcohol and tobacco.
Overall, these measures aim to reduce the significant income gap between the poorest and the richest segments of the population, as well as to increase budget revenues. This, in turn, will enable the government to fulfil its social obligations more effectively, leading to an improved standard of living for the population.
Another significant step on the way to the model of a Fair Kazakhstan is undoubtedly the expansion of citizens' participation in the governance of the state.
As the Head of State stated in his Address, from the next 2025 all akims of districts and cities of regional significance will be elected through direct elections. This decision follows the results of pilot elections for 45 akims held across all regions of the country last autumn. Additionally, since 2021, the akims of rural districts have been elected directly by the population.
In this context, the previously implemented mixed majoritarian-proportional system for electing deputies to the Mazhilis of Parliament and local maslikhats should also be considered. This system has allowed Kazakhstani citizens to elect specific candidates to representative bodies and even to nominate themselves, regardless of party affiliation. Moreover, citizens now have the right to recall deputies elected from single-member constituencies if they perform unsatisfactorily, without waiting for the end of their term.
Thus, the main goal of the reforms articulated in the Address to the people of Kazakhstan, titled "Fair Kazakhstan: Law and Order, Economic Growth, Social Optimism," is to pivot towards the ordinary citizen, addressing their interests and needs, and to engage citizens and civil society in the process of state governance. In other words, a person from the object of governance should become its subject, actively and on an equal partnership basis interacting with the authorities.
Director
of the Presidential Centre
of the Republic of Kazakhstan
Bakytzhan Temirbolat
