BAKU, Azerbaijan, September 29. Kazakhstan's
government tax reforms will likely further strengthen fiscal
resilience, Moody's Ratings said in its rationale for affirming
Kazakhstan's Baa1 rating.
“The new tax code effective from January 2026 raises the
value-added tax rate, introduces progressive personal income
taxation and increases taxes on selected businesses, luxury assets
and excisable goods,” Moody's said.
The agency noted that widening the revenue base will reduce
fiscal exposure to commodity price volatility. Stronger digital tax
administration will also improve tax collection and reduce
leakages.
“We expect these reforms to support relatively modest budget
deficits, keeping Kazakhstan's debt burden low relative to peers.
However, the eventual revenue yield, the pace of reduction in
transfers from the National Fund of the Republic of Kazakhstan and
the effect of higher taxes on domestic demand remain important
uncertainties,” Moody's said.
The agency also noted that Kazakhstan's strong government
balance sheet remains a central support for the Baa1 rating. The
sovereign's low debt burden, high debt affordability and sovereign
wealth fund assets provide policy flexibility and a significant
buffer against economic shocks.
Government debt amounted to 22.8% of GDP in 2025, well below the
median for similarly rated sovereigns. Although high domestic
interest rates have weakened debt affordability compared with
previous years, it remains stronger relative to peers, and Moody's
expects stronger revenue collection and the gradual normalization
of monetary conditions to limit further deterioration.
Moody’s affirmed the Government of Kazakhstan’s local and
foreign currency long-term issuer ratings at Baa1, with a stable
outlook. The agency also affirmed the foreign currency senior
unsecured debt and MTN programme ratings at Baa1 and (P)Baa1,
respectively.
