Experts comment on potential unemployment of taxi drivers due to VAT increase
In the heart of Central Asia, the Republic of Kazakhstan is set to undergo changes in its tax legislation, potentially causing a significant shake-up in the taxi industry. The Association of Taxi Parks and Courier Services has predicted that around 200-300 taxi parks may face bankruptcy as a result of these changes.
The crux of the issue lies in the potential exclusion of taxi parks from the simplified tax system. According to Meerimbek Abylkassov, the association's chairman, this move would lead to a sharp increase in rental fees for drivers. If the rental fee for a car were to increase to 22,000 tenge, as suggested, it would significantly reduce drivers' net income, leaving them with only 4-5,000 tenge. This, in turn, makes the job of a taxi driver unprofitable.
Aitkhozin, a taxi driver, shares this sentiment, stating that he needs to make at least 25,000 tenge a day to cover car rental, fuel, and food expenses. Given that one taxi ride in Almaty takes at least half an hour, allowing for a maximum of 2 rides per hour, the job requires a considerable amount of effort and time. Aitkhozin works from 5 AM to 1 AM, extending his workday to 15-16 hours, not counting breaks for food and rest.
The association also raises concerns about a 40% increase in the tax rate, which could create several problems. According to the association representative, this increase would lead to a significant decrease in drivers' incomes, causing many to leave the market, resulting in a shortage of taxis.
Kairat Egizbaev, a tax lawyer, shares similar concerns, expressing worry about the government's new powers to decide which businesses can use tax incentives. He argues that taxi and car rental services are considered socially significant industries in various countries, receiving support through tax breaks, accelerated depreciation, or VAT exemptions. Egizbaev proposes creating a separate category for these services to retain access to incentives.
In an attempt to provide more choices for the public in the Kazakh taxi market, Nurlan Sauranbayev, the Minister of Transport, is in talks with other aggregators. However, the specific taxi companies in Kazakhstan that feel threatened by the tax system changes, and whether they could represent competitors in the local taxi market, remains unclear.
An audit conducted in Kazakhstan has revealed risks of overpricing and reduced driver incomes in the operations of "Yandex.Taxi". Despite these concerns, the future of the Kazakh taxi industry remains uncertain as it navigates the upcoming changes in tax legislation.
Read also:
- Understanding Hemorrhagic Gastroenteritis: Key Facts
- Trump's Policies: Tariffs, AI, Surveillance, and Possible Martial Law
- Expanded Community Health Involvement by CK Birla Hospitals, Jaipur, Maintained Through Consistent Outreach Programs Across Rajasthan
- Abdominal Fat Accumulation: Causes and Strategies for Reduction
