According to the report analysis, ‘Kazakhstan Upstream Fiscal And Regulatory Report – Alternative Subsoil Tax Regime Looks To Incentivize Offshore And Deep Reservoir Development’ suggests that bonuses and fee, signature bonus, commercial discovery bonus, historical cost compensation are the tax subsoil use contracts. Moreover, various research and development programs have been conducted in the oil and gas exportation which resulted in the handsome amount of income in return. As the economy of Kazakhstan is majorly depend on the export of oil which includes various types of taxes such as rental tax on exports, export duty and others miscellaneous expenses still Kazakhstan market is at its nascent stage in the subsoil market.
Kazakhstan is a contiguous transcontinental country in central Asia with Astana as a capital. It is the ninth largest country in the world which shares its border with Kyrgyzstan, Turkmenistan, China, Uzbekistan and Russia. Besides this, country is having unique geographic location at the crossing of Europe and Asia which make it a noteworthy transit point for traffic moving between significant markets in Europe and Asia. Primarily, the economic growth in Kazakhstan is driven by domestic demand and high growth in exports but the Kazakhstan is heavily dependent on oil exports. The country has great potential for mining as it has rich reserves of gas, barium, gold, oil, silver, lead and others. Moreover, according to the approximation Kazakhstan has proven to be 11th largest reserves of both petroleum and natural gas.
Kazakhstan is a developing country with the short policies of managing risk and performing very well in the market of subsoil from the last few years. Continuous development in the technologies will lead to the market growth significantly in the coming years. Kazakhstan has an abundant supply of handy mineral and fossil fuel resources. Development in the subsoil extraction has attracted the foreign investment and accounted in the nation’s industrial sectors. With the extensive usage of the subsoil the market is becoming more competitive with the new investments and brings more alternative tax on subsoil use and indirect taxation such as property tax, value added tax, import duties, environmental levy and others. The new entrants are investing more and more in the technology of manufacturing of subsoil industry plays a significant role in the growth of the industry as well as in the branch profit tax, excess profit tax and corporate income tax.
Therefore, with the wide usage and increasing competition of subsoil in the market the companies are taking initiative related to cost recovery, profit-sharing and other aspects of the business which reduce the amount of tax from a particular person and lead to positive growth in the market in the coming years. Moreover, improvement in the technologies of the subsoil industries in the Kazakhstan region has led to significantly increase the competition and demand for the subsoil from the neighboring countries which will further led to witness significant growth in the market in the future years. Therefore, the future of this industry will be aided by the positive growth in the coming years.
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Ankur Gupta, Head Marketing & Communications