Kazakhstan is discussing the possibility of completely abolishing value-added tax (VAT) on medical services. The initiative was proposed by Kanat Sharlapayev, Chairman of the Board of the National Chamber of Entrepreneurs "Atameken", who suggested setting a unified VAT rate of 5% for all medicines and medical devices, while fully exempting medical services from the tax, reports infohub.kz.

The issue was considered at a meeting of the Project Office for the implementation of the new Tax Code. As Sharlapayev noted, in most OECD countries, medical services are not subject to VAT. The business community made this proposal after discussing various taxation options for the industry.

Currently, the new Tax Code provides for a phased change in VAT rates in healthcare. Medical services and medicines provided under the guaranteed volume of free medical care (GOBMP) and the compulsory social health insurance (OSMS) system are fully exempt from tax. The exemption applies to more than 3,000 names of medicines.

In addition, VAT is not levied on medical services for diagnosis, treatment, prevention, and rehabilitation of rare and socially significant diseases. Imports of pharmaceutical substances used for the production of medicines under GOBMP and OSMS are also exempt from tax.

For other medicines and medical devices, a reduced VAT rate applies: from January 2026, it is 5%, and from January 1, 2027, it should rise to 10%.

The meeting noted that applying different rates complicates administration. Therefore, industry representatives have repeatedly raised the issue of introducing a single flat rate for medicines and medical devices.

Participants also pointed out that practice, including during the pandemic, has shown that tax exemptions alone do not affect the cost of medical services, medicines, and medical devices. Therefore, any changes to the tax regime require additional assessment of their impact on the budget, the market, and the accessibility of medical care for the population.

Following the meeting, the parties decided to return to this issue after a detailed analysis of possible consequences.