Kazakhstan: COVID-19 Active Response and Expenditure Support (CARES) Program

approved

The CARES Program (Program) is supported by a Loan extended by AIIB under AIIB's COVID-19 Crisis Recovery Facility (Facility) and co-financed with a policy-based loan extended by the Asian Development Bank (ADB) under its Countercyclical Support Facility COVID-19 Pandemic Response Option (CPRO). The Program would cover the Government of Kazakhstan (GoK)'s (i) immediate COVID-19 health policy response, (ii) social protection and employment recovery measures, and (iii) economic stimulus measures. Specifically, the Program includes: (i) cash payments to the unemployed (USD95-100 per month per person); (ii) measures to mitigate the impact of higher food prices, i.e. lowering the VAT rate, a nationwide food supply program to provide free food to 1.1 million people and price caps on essential foods to support vulnerable groups; (iii) increase of all social payments by 10 percent; (iv) new tax incentives, such as zero percent property tax rates (for retail, trade, catering, entertainment and hospitality businesses); zero land tax (for agricultural producers); zero income tax for individual entrepreneurs and for small and medium-sized enterprises (SMEs) in catering, lodging, transportation, consulting and tourism; six-month exemption from payroll taxes; deferral of payments of taxes and other compulsory budget payments for SMEs until June 1, 2020; suspended enforcement of the collection of overdue tax obligations; suspended accrual of penalties for overdue tax obligations until August 2020, and extended tax reporting deadlines until September 2020.