Includes information on average tariff rates and types that U.S. firms should be aware of when exporting to the market.
As part of its WTO accession in 2015, Kazakhstan agreed to lower 3,512 tariff rates gradually, to an average of 6.1 percent in 2020. Tariffs on agricultural products will see the largest reduction, from 16.7 percent to an average of 7.6%. In January 2016, Kazakhstan began applying lower tariff rates to certain food products, automobiles, airplanes, railway wagons, lumber, alcoholic beverages, pharmaceuticals, freezers, and jewelry.
In 2018, Kazakhstan’s Most Favored Nation (MFN) applied tariff rate averaged 7.1 percent. Kazakhstan applies a zero percent rate on approximately 1,900 tariff lines, including livestock, pork, fish products, chemical and pharmaceutical products, cotton, textiles, machinery and equipment, medical vehicles, and some types of airplanes. Kazakhstan’s simple average WTO bound tariff rate is 10.6 percent for agricultural products and 6.4 percent for non-agricultural products. Kazakhstan’s maximum WTO bound tariff rate for industrial products is 19 percent, but not less than 0.68 Euros per cubic centimeter (approximately USD 0.77 per cubic centimeter), while its maximum WTO bound tariff rate for agricultural products is 50 percent, but not less than 0.75 Euros per kilo (approximately USD 0.85 per kilo).
In 2010, Kazakhstan established tariff-rate quotas (TRQs) on imports of poultry and beef to meet its obligations under the Russia-Kazakhstan-Belarus Customs Union (CU), which has continued under the EAEU. In 2012, U.S. exporters raised concerns about the trade-limiting effects of these TRQs and the manner in which they were calculated and allocated. In October 2017, Kazakhstan developed new rules for TRQ allocation that establish clear deadlines and delineate authorities among government agencies. The volume of TRQs is expected to remain unchanged, however. Pork is not subject to a TRQ, and the tariff rate on pork is expected to be lowered from 30 percent to 25 percent in 2020.
From 2022, Kazakhstan introduced a VAT obligation on foreign internet e-commerce companies that sell goods and provide electronic services with a registration procedure but may not have to provide tax reporting. To avoid the risk of double taxation of cross-border e-commerce entities, including ones within the EAEU, Kazakhstan is limiting the permission on transaction reporting to several banks. Harmonization of the procedures within EAEU is set to further increase the share of e-commerce to 15% with the number of online consumers expected to grow to 7.7 million by 2025.
Online commerce is gaining momentum, with the volume of online retail sales reaching $1 billion in 2021. An increase in broadband internet coverage also pushed online sales up. As of April 2022, there were more than 17 million cellular subscribers (out of a population of over 19 million) with access to the internet, and 2.8 million registered fixed internet subscribers. The volume of non-cash payments also rose impressively. At the end of the first quarter of 2022, the volume reached $42.5 billion, which exceeds the 2019 entire year level by 43 percent.
In May 2021, Kazakhstan was allowed on the Amazon platform, so Kazakh online retailers can now receive payments through Kazakhstani banks. Additionally, the trade ministry is working toward Kazakhstan receiving access to the Mundus Agri platform, a global online agricultural market. We therefore expect e-commerce, both wholesale and retail, to take off in the forecast period.
Given the growth of e-commerce, the National Bank of Kazakhstan (NBK) is working on developing Kazakhstan’s digital payment infrastructure, for example, by standardizing QR-code payments and developing an instant payment system (IPS). An IPS pilot was launched in November 2021. Going even further, the NBK is testing the possibility of introducing a central bank digital currency, the “digital tenge,” supported and guaranteed by the NBK.