Kazakhstan has become the latest country to demand tax revenues from technology giants Google and Apple, which have deftly exploited international loopholes to reduce their global fiscal burden.
Daulet Yergozhin, chairman of the state revenue committee, told a press conference on August 10 that the government should be earning money from transactions completed in Kazakhstan that profit those companies.
Measures on how to ensure those taxes are paid will be studied in the fall, said Yergozhin, whose committee operates under the auspices of the Finance Ministry.
Yergozhin cited the recent precedent set in Russia and said that the experience there would serve as a useful guide in formulating Kazakhstan’s approach. As The Moscow Times has reported, State Duma deputies in June approved a bill requiring foreign IT companies to pay sales taxes on online content purchases by customers in Russia. Residency status will be determined through credit card details or IP addresses, according to the legislation.
A roundtable is planned in Kazakhstan with representatives from the two US companies in September.
“They should in any case pay since the size of the transactions that is effected by these two platforms is huge. There are multimillion operations in dollars. We should receive our share of this in the budget,” Yergozhin said.
Neither Apple or Google have yet responded to the remarks.
Authorities have only recently been intensifying their focus on online businesses. In May, tax inspectors began pursuing entrepreneurs that trade through Instagram and Facebook accounts and conducting “clarificatory work” with them. That term is typically used to refer to final warnings issued before criminal investigations are opened.
According to Yergozhin, those efforts have yielded positive effects, with around 95 percent of Kazakhstanis that had been trading through social media deciding to register officially as individual entrepreneurs and start paying taxes,
Yergozhin said that the national post service has played its part by incorporating payment systems into its online trading platform
“People that trade through Kazpochta have to be registered and pay taxes. Payments are performed transparently through a cashless system and there is a guarantee that the recipient of bought goods can, if the goods are not to [the buyer’s] pleasing, later return the items or file a complaint,” he said. “How are you supposed to do that on Instagram? The trader can just delete their account, and that’s that.”