Type to search

Kazakhstan Leader Urges Higher Tax on Mining Companies

The resources move was included in a package of measures announced to bridge income inequality as rage at the country’s elites intensified


A burnt-out car sits outside the city administration office in Almaty following the violent protests triggered by fuel price rises in Kazakhstan, on January 7, 2022. Photo: Stringer, Reuters.

 

Kassym-Jomart Tokayev, Kazakhstan’s president, ordered his government on Tuesday to extract greater tax revenue from the mining sector, which he said was profiting from higher metals prices.

Kazakhstan has just weathered the worst bout of unrest since it gained independence from the Soviet Union three decades ago.

A plan for higher taxation of the mining sector was included in a package of measures announced by Tokayev on Tuesday to bridge income inequality as rage at the country’s elites has intensified.

The Central Asian country is the world’s top global producer of uranium, the metal that fuels nuclear power plants, and also has large deposits of copper, iron ore and zinc.

Prices of industrial metals prices surged last year and the price of uranium also jumped last week after the unrest, which was initially sparked by protests against a hike in fuel prices but widened into what authorities have since called an attempted coup.

“The income of firms in the mining sector has grown against the backdrop of higher prices for raw materials,” Tokayev said in his speech to parliament.

“I am ordering the government to [bring] additional revenues to the budget. In exchange we can provide large incentives for the exploration and development of new deposits for large mining and other companies.”

Among other measures, Tokayev urged big businesses to make regular contributions to a new charity foundation, froze the salaries of senior-level civil servants and said the government must eliminate monopolies and ensure fair competition.

He did not provide additional details on the initiative or on the incentives that might be given to miners. Nor did he say when the measure might come into force.

Continued unrest in Kazakhstan has hit investor confidence, analysts said. “Prolonged social unrest could undermine political, institutional and financial stability,” rating agency Moody’s said in a note.

Kazkahstan is also fighting a surging coronavirus pandemic. Azhar Giniyat, health minister, said the country has registered over 8,000 cases over the past seven days, almost three times more in the previous week.

 

  • Reuters, with editing by George Russell

 

READ MORE:

Oil Prices Jump Over Kazakhstan Unrest, Uranium Less Affected

Kazakhstan Unrest Slashes Bitcoin Mining Operations

 

George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

logo

AF China Bond