The Impact of Tax Reforms on Income Inequality in Kazakhstan: Prospects and Mechanisms of Redistribution
Year: 2026
Type: article
Abstract: This study assesses the transformation of the tax system of the Republic of Kazakhstan, specifically the transition from a proportional ("flat") model to a progressive personal income tax (PIT) scale introduced in 2026. The study tests the hypothesis that differentiated rates and a luxury tax can reduce income concentration. The empirical part uses observed panel data for 20 regions for 2014–2024, while the 2026 values are explicitly treated as forecast/modelled scenarios. Fixed-effects panel regression, the Reynolds–Smolensky index and the Kakwani index are applied. The retrospective estimates indicate a strong negative statistical association (r = -0.78) between PIT-related tax revenues and the Gini coefficient; this relationship is interpreted as associative rather than as direct causal evidence. Under the central 2026 simulation, the redistributive capacity of the PIT system (MT index) increases about 5.2 times relative to the 2024 baseline. At the same time, the progressive effect of PIT (K = +0.067) is partly offset by the regressive effect of VAT at 16% (K = -0.058), and under adverse price-pass-through conditions this offset may become substantial. The results support differentiated VAT relief for socially important goods and harmonization of tax regimes for individual entrepreneurs and employees to reduce tax-base erosion.
Source: Экономика бизнес и услуги
Language: English
Topic: Economic and Fiscal Studies
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W7224176255