DID SMALL BUSINESS IN KAZAKHSTAN REALLY SHRINK IN 2026? THE NEW TAX CODE, REGIONAL TAX RATES AND THE FALL IN THE NUMBER OF INDIVIDUAL ENTREPRENEURS

Abstract

From 1 January 2026 Kazakhstan has a new Tax Code. The basic rate of the simplified declaration regime for small business became 4%, and every local council (maslikhat) could lower or raise it by up to half, so different regions chose different rates. At the same time, official statistics showed that the number of active small and medium enterprises (SMEs) fell by 8.8% between 1 January and 1 September 2026. In this study I asked whether the regions that chose lower rates kept more of their businesses, and where the fall actually came from. I used 28 monthly releases of the Bureau of National Statistics (June 2024 - September 2026) and the list of maslikhat decisions for all 20 regions. In the same months of 2025 the number of active SMEs grew by 5.0%, so the change in 2026 was about 13.7 percentage points worse than a year before. The whole fall was in individual entrepreneurs, whose number dropped by 11.3% (203,398 units), while legal entities grew by 3.2%. Almost all of the fall happened between January and May 2026 and then stopped. Three groups of activities, transport (taxi and couriers), renting of housing and personal services, held 30% of individual entrepreneurs but gave 74% of the fall, and these are the activities allowed in the new special tax regime for the self-employed, which can be used only by people who are not registered as entrepreneurs. The regional rates did not explain the fall: regions with a 2% and a 3% rate in their regional centre lost a similar share of SMEs (median -7.8% and -9.2%, p = 0.34). My conclusion is that most of the fall is a change in how people are registered after the new tax rules, and not a mass closure of businesses, and that SME counts for 2026 cannot be compared with earlier years without taking this into account.

Keywords: small and medium enterprises, individual entrepreneurs, self-employment, tax reform, local taxes, business register, Kazakhstan

Дәйексөз келтіру үлгісі

Amangeldi A. DID SMALL BUSINESS IN KAZAKHSTAN REALLY SHRINK IN 2026? THE NEW TAX CODE, REGIONAL TAX RATES AND THE FALL IN THE NUMBER OF INDIVIDUAL ENTREPRENEURS // Central Asian Scientific Journal. – 2026. – No. 4(32), Vol. 1. – Pp. 124–132.