Tag Archives: Kazakhstan

Kazakhstan imposes luxury tax

NOV. 21 2013 (The Conway Bulletin) — Kazakhstan’s parliament passed a tax rise on alcohol and cigarettes which will balance prices with Russia and Belarus, its partners in the Customs Union, but could also anger ordinary people.

President Nursultan Nazarbayev voiced his approval for a law on so-called luxury goods in October during a party congress and also called for higher wealth taxes.

Besides higher taxes for large houses and powerful cars, the law specifically targets alcohol and cigarettes, which Mr Nazarbayev called “evil passions”.

The law will double the excise duties on strong alcoholic beverages in 2014, progressively reaching in 2016 a level of 1,600 tenge (about $10.50), more than three times the current value. On cigarettes, the increase will be 30% every year.

Russia has limited the amount of spirits that can be transported across the borders of the Customs Union in order to avoid price dumping. In Kazakhstan prices and excise taxes on alcohol and cigarettes had been lower than in Russia and Belarus. The new tax rises should change this.

Parliamentarians also justify the law because they said it would curb smoking and excessive drinking.

Other analysts, though, said increased prices could just push alcohol consumption underground and increase smuggling.

More tax increases for Kazakhstan’s wealthy are expected in the future. In the same speech in October that Mr Nazarbayev called for an increase in taxes on property, alcohol and cigarettes, he also called for a rise in income tax for the rich.

“Now when the wealthy class has expanded they can and should contribute towards social responsibility,” he said. “In our country a millionaire and a worker pay the same 10% income tax. We should think about it.”

Watch this space.

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(News report from Issue No. 162, published on Nov. 27 2013)

Kazakh court sentences extremists

NOV. 19 2013 (The Conway Bulletin) — A court in Atyrau, western Kazakhstan sentenced a 26-year-old man to 20 years in jail for leading an Islamic extremist group blamed for a series of bomb attacks. Orynbasar Munatov was allegedly the head of Jund al-Khilafah, which means Soldiers of the Caliphate. Pakistan extradited him to Kazakhstan in June.

ENDS

(News report from Issue No. 161, published on Nov. 20 2013)

Kazakhstan to move Central Bank to Astana

NOV. 15 2013 (The Conway Bulletin) — Kazakhstan’s new Central Bank chief, Kairat Kelimbetov, said he wanted to move the Bank to Astana from Almaty. Mr Kelimbetov replaced the independent-minded Grigory Marchenko as the Central Bank chief in October. Reports have said Kazakh President Nursultan Nazarbayev wants the Central Bank in Astana.

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(News report from Issue No. 161, published on Nov. 20 2013)

Kazakhstan expands diplomatic ties

NOV. 14 2013 (The Conway Bulletin) — Kazakhstan opened embassies in South Africa and Vietnam, continuing its diplomatic roll our across the world. The next day Kazakhstan gained observer status at the African Union, the continent’s main political bloc, in Addis Ababa.

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(News report from Issue No. 161, published on Nov. 20 2013)

Kazakhstan’s Halyk Bank rejects BTA deal

NOV. 18 2013 (The Conway Bulletin) — Halyk Bank, owned by Timur Kulibayev and his wife Dinara Nazarbayeva, turned down the option of exchanging its pension fund for the government’s shares in BTA Bank. By declining the swap, Mr Kulibayev potentially pit himself against Kazakh President Nursultan Nazarbayev, his father-in-law.

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(News report from Issue No. 161, published on Nov. 20 2013)

Halyk Bank posts steady growth

NOV. 18 2013 (The Conway Bulletin) — Halyk Bank, Kazakhstan’s second largest bank, reported that profits for the first nine months of the year grew by 4.1% compared to a year earlier, partly buoyed by an increase in consumer lending. The 8.3% increase in loans is more evidence, if it was needed, that consumer confidence in Kazakhstan has bounced back.

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(News report from Issue No. 161, published on Nov. 20 2013)

Bread price increases in Kazakhstan

NOV. 19 2013 (The Conway Bulletin) — Kazakhstan’s agriculture minister Asylzhan Mamytbekov said he is not going to intervene to stop bread price rising. Higher utility bills and problems with getting loafs to market have increased bread prices in recent months in southern Kazakhstan. Bread price rises are a potential source of social discontent.

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(News report from Issue No. 161, published on Nov. 20 2013)

Kazakhstan names new finance minister

NOV. 20 2013 (The Conway Bulletin) — Kazakh President Nursultan Nazarbayev has made clear he wants to transform, relatively, Kazakhstan’s economy.

He wants to sell stakes in the three banks that the state had to bail out in the 2008/9 global financial crisis, unify and nationalise Kazakhstan’s pension schemes and launch a handful of companies onto the stock exchange.

There’s a lot to do and that, analysts said, is probably the driving force behind his recent reshuffle.

Last month Mr Nazarbayev installed Kairat Kelimbetov, well-known for his loyalty, as head of the Kazakh Central Bank. Analysts also said the promotion on Nov. 5 of Bakhyt Sultanov from deputy head of the presidential administration to finance minister was driven by a similar motivation.

“The new budget, which carried an increase in taxation, the lifting of the pension age and the possible elimination of the so-called new-born cheque are controversial matters,” said Nygmet Ibadildin an Almaty-based analyst. “The promotion (of Sultanov) shows that the president is fully in control.”

Eldar Madumarov, an economics professor in Almaty, agreed. He also said that Bolat Zhamishev’s move from finance minister to regional development minister should be considered a promotion and not a demotion.

“Zhamishev is deemed to be responsible and was moved to be regional development minister,” he said.

Since clashes between protesters and police in 2011 killed 15 people in western Kazakhstan, the Kazakh government has prioritised improving life in the regions.

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(News report from Issue No. 161, published on Nov. 20 2013)

Kazakhstan’s Halyk Bank refuses to buy out BTA

NOV. 20 2013 (The Conway Bulletin) — When the Kazakh government orders something to be done, it generally gets done so when Halyk Bank declined an invitation to effectively buy out the state’s shares in BTA Bank, it was clear that something was up.

The Kazakh government wants to unite the country’s pension funds. It offered its 97% stake in BTA Bank in return for Halyk Bank’s private pension fund. Kazakh President Nursultan Nazarbayev’s second daughter Dinara and her husband, Timur Kulibayev, own Halyk Bank, the second biggest in Kazakhstan.

Mr Kulibayev used to be the darling of Kazakh politics and business and was talked about as a successor to Mr Nazarbayev. His star has waned, though, since a riot in western Kazakhstan killed 15 people in 2011.

At the time he was in charge of Samruk-Kazyna, Kazakhstan’s sovereign wealth fund. He was blamed for the riot and his rivals have been trying to undermine him since.

Reports from Kazakhstan have said that he has recently rowed with senior government officials and argued with his father-in-law.

Rejecting an order for his bank, Halyk Bank, to buy out the government’s shares in BTA Bank may be a public expression of this discontent.

(News report from Issue No. 161, published on Nov. 20 2013)

Russian oil transits through Kazakhstan

NOV. 11 2013 (The Conway Bulletin) — The deal has been in the making all year. It’s still not there, yet, but it is close.

Rosneft, a Russian energy company, signed a preliminary deal with Kazakh energy company Kazmunaigas and oil pipeline monopoly KazTransOil to transit oil to China.

A final deal is expected by the end of the year.

Russia is increasing exports to China but it has run out of pipeline capacity. Kazakhstan has invested hugely in expanding its pipeline network and has excess capacity so, for a fee, it has agreed to pump Russian oil east.

The deal is important because it further cements the Russia-Kazakhstan alliance; Kazakhstan is a member of Russia’s Customs Union and the two countries are integrating their defence systems.

It also highlights the importance of Kazakhstan’s pipeline infrastructure to China. Without it, China’s oil supply would be weaker.

Media reported that Russia plans, currently, to pump 140,000 barrels per day through Kazakhstan’s pipeline network. This, though, is expected to rise.

The final details have yet to be worked out but this is significant news.

(News report from Issue No. 160, published on Nov. 13 2013)