Kazakhstan macro: looking for 2026 budget challenges

KAZAKHSTAN - Report 15 Sep 2025 by Evgeny Gavrilenkov

Despite the nation’s budget performance appearing stable in 7M27, with high inflation and a weaker tenge boosting revenues tied to the exchange rate, some questions remain about the 2025 and 2026 budgets. The republican budget saw its total revenue grow by 12.4% in 7M26, with tax revenue increasing by 19.3%. Local budgets visibly exceeded expectations, collecting more tax revenue than the revised 2025 target. However, discrepancies such as the uneven distribution of corporate profit taxes between republican and local budgets and the underperformance of VAT collection in the republican budget stand out. The Ministry of Finance reported that only 93.8% of the targeted VAT was collected in 7M25, amounting to 47.1% of the annual goal. The republican budget collected in 7M25 only 44.0% of the corporate profit tax assumed to be paid in 2025 as a whole. The target for the corporate profit tax stands at KZT5.1 trln, while the actually collected amount was about KZT2.2 trln. Trends on the local levels appeared more impressive, although amid less ambitious targets (KZT1.6 trln for the full year). In 7M25, the actually collected amount exceeded the plan for this period by about 16% and approached nearly 65% of the yearly target.

In this report, we won't provide an overly detailed analysis of all levels of the nation’s budgets but will instead focus on general trends and offer comments on the 2026 republican budget draft. With the 2026 tax reform in focus, the government is emphasizing tax revenues and their structure. It also aims to reduce annual transfers from the National Fund, as its assets have stagnated in dollar terms in recent years.

All in all, the 2026 republican budget appears reasonable and cautious on the expenditure side, but we believe that expectations of a much higher VAT collection might not materialize. However, a hypothetical lack of VAT could be offset by stronger corporate profit tax flow and further weakening of the tenge.

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