Taxes bring KZT 14.4tn as Kazakhstan shifts its budget model

Kazakhstan’s budget is changing its source of support. In two years, the share of taxes in government revenues rose to a record 77.6%, while tax receipts increased by another 15.2% in the first half of 2026, DKNews.kz reports.

The shift is reflected in assessments by the ACRA rating agency and an analytical review by the Association of Financiers of Kazakhstan. Both point to the same trend: domestic tax revenues are playing a larger role, while direct reliance on transfers from the National Fund is gradually declining.

Tax share rises from 69% to a record 77.6%

Between 2023 and 2025, the share of tax revenues in government income increased from 69% to 77.6%.

For the budget, this is a significant structural change. The higher the share of recurring tax revenues, the less government income depends on fluctuations in the oil market and one-off sources of financing.

“A positive trend that ensures greater predictability and stability of revenues,” ACRA said in its assessment.

According to the study, VAT, individual income tax and excise duties grew faster than the economy in real terms. Excise revenues showed particularly strong momentum.

“Excise duties demonstrate the most pronounced dynamics, significantly outpacing all other tax revenues in terms of growth,” the report said.

The National Fund remains a buffer, but its role is changing

Kazakhstan’s budget has not yet eliminated its dependence on oil savings.

However, transfers from the National Fund continue to smooth seasonal fluctuations in government revenues. According to ACRA, the difference between revenue volatility with and without transfers is substantial.

“The coefficient of variation calculated for total revenues amounts to 13% of the corresponding coefficient for the non-transfer component,” the analysts said.

In practical terms, National Fund transfers make the overall flow of budget revenues considerably more stable.

Under the scenario cited in the analysis, without such support the budget deficit could have reached 3% to 8% of GDP, while the debt burden could have been significantly higher.

At the end of 2024, Kazakhstan’s public debt stood at 23.5% of GDP. Under a scenario without National Fund transfers, that figure could have risen to 53.5% of GDP.

Taxes brought KZT 14.4 trillion in six months

Figures for the first half of 2026 suggest that the trend has continued.

Tax revenues increased by 15.2% to KZT 14.4 trillion. A year earlier, the growth rate stood at 11.2%.

The total increase in tax receipts amounted to around KZT 1.9 trillion, with most of the additional revenue going to the republican budget. According to the figures cited, receipts to the National Fund and local budgets changed only marginally.

VAT revenues showed particularly strong growth, rising by 43.1% to KZT 1.2 trillion.

Corporate income tax increased by 16.1%, while non-oil mineral extraction tax rose by 59.9%.

VAT growth reflects a broader tax shift

The Analytical Center of the Association of Financiers of Kazakhstan links the increase to several factors.

“VAT dynamics reflect the combined effect of the higher rate, an expanded tax base and stronger administration. Growth in corporate income tax, despite weaker current financial results of enterprises, may be linked to a time lag in tax payments, including the results of a more profitable 2025, as well as improved collection. Growth in non-oil mineral extraction tax was supported by favorable pricing conditions in the metals market,” the AFK Analytical Center said.

This means the increase in budget revenues is not being driven by a single source. Changes in tax conditions, expansion of the tax base, improved collection and market conditions are all contributing.

Another 546,000 people entered the formal tax system

Expansion of the tax base has become a separate driver of revenue growth.

According to AFK data, 546,000 previously unregistered citizens were formalized during the first half of the year.

The number of business entities increased by another 499,000 to 2.9 million.

This marks one of the key elements of the budget transformation: the government is seeking to increase revenues not only through changes in tax rates, but also by expanding the number of economic participants formally paying taxes.

AFK says the current fiscal consolidation increasingly relies on a broader non-oil tax base and stronger administration.

Doctor of Economics and professor Igor Filkevich also pointed to the impact of digital tax administration, which, according to him, generated an additional KZT 262 billion for the budget.

Spending is growing more slowly than revenues

The shift is also visible on the expenditure side.

Government spending increased by 8.6% to KZT 19 trillion in the first half of 2026. A year earlier, spending had grown faster, by 13.3%.

The slowdown was recorded across different levels of government. Republican budget expenditures rose by 5.1%, compared with 7.6% a year earlier, while local budget spending increased by 6.7%, down from 21.6%.

The composition of spending is also gradually shifting toward current and financial operations.

The key difference is the pace: tax revenues grew by 15.2%, while expenditures increased by 8.6%. Against this backdrop, the budget deficit narrowed in the first half of the year.

Kazakhstan is reducing direct reliance on oil savings

The budget is being reshaped in several directions at once.

The tax share has reached a record high, the non-oil tax base is expanding, spending is growing more slowly than revenues, and direct use of oil savings is declining.

International reserves remain an additional buffer. According to the cited estimates, they increased by 28% in 2024 and by 29.4% between September 2024 and September 2025. Their volume is equivalent to roughly 8–9 months of imports.

These changes point to a gradual move away from a model in which oil transfers play a major role toward one with greater reliance on domestic tax revenues and market financing.

Earlier, we reported that Kazakhstan’s 2026 budget was formed without targeted transfers from the National Fund for the first time.