Measures to support entrepreneurship in a state of emergency
On March 23, 2020, the President of the Republic of Kazakhstan Tokayev K.K. A meeting of the State Commission on the state of emergency was held.
The meeting highlighted the main points on stabilizing the economic situation in the country in a state of emergency.
The total package of anti-crisis measures, excluding tax preferences and support at the local level, will amount to 4.4 trillion tenge or $10 billion.
The main points of the speech, which relate to the support of entrepreneurship:
1. The President instructed to review the methods of work with an emphasis on prevention, excluding any facts of pressure on entrepreneurs from the power bloc and fiscal authorities for the period of the crisis. It was instructed to review the priorities in the work of the anti-corruption service for the period of the state of emergency, with an emphasis on prevention.
2. Instruction on the development of a set of measures for tax incentives for business activity and ensuring price stability.
In this connection, it is necessary to provide SMEs with a deferment for the payment of all types of taxes and other obligatory payments for a period of 3 months, without accruing fines and penalties.
You should also consider the need for a temporary reduction in VAT on agricultural products and food products, zeroing customs duties on critical imports, and so on.
3. As part of supporting the national economy, one of the effective mechanisms to support these sectors will be the suspension of payments of principal and interest on all loans to small and medium-sized businesses affected by the current negative situation.
4. The Ministry of Finance is obliged to strengthen control over the fulfillment of contractual obligations by state bodies in the framework of public procurement.
All payments for actually rendered services and works must be made within 5 days. Delay, the demand for additional paperwork should be excluded.
State bodies and quasi-state companies should not charge penalties and include the supplier in the register of unreliable suppliers if the failure to fulfill the contract is associated with current negative developments in the economy.
It is required to form a register of domestic producers as soon as possible and introduce a special regime for public procurement, providing for the abolition of the need to make a security deposit or a bank guarantee.
The relevant Decree has already been signed, which should be implemented by the Government.
5. The President instructed to increase funding for the “Economy of Simple Things” program up to 1 trillion tenge.
These are significant funds provided at an affordable rate of 6% per annum. They can be used primarily for investment purposes.
In addition to this, the President decided to provide another 600 billion tenge for lending to working capital of small and medium-sized businesses at 8% per annum.
6. Another tool to support business activity and employment will be a special program “Employment Roadmap”. This tool has performed well during previous crises.
The President instructed to ensure its financing at the level of at least 300 billion tenge.
On the basis of incoming applications from the regions, we have reserves to increase it to 1 trillion tenge. This will create 250,000 jobs and help us implement not only local facilities, but also a number of republican ones, including the construction of reservoirs, dams and other structures.
The National Bank should help the Government to finance this initiative.