The development of entrepreneurship as one of the locomotives of the entire economy directly depends on the favorable conditions that the state creates for it. Therefore, the protection of the constitutional rights of businessmen is one of the priority tasks of the prosecutor’s office. Read about how the prosecutor’s office will protect the rights of entrepreneurs in the review material Strategy2050.kz.

As the President of the Republic of Kazakhstan, Kassym-Jomart Tokayev, noted in his September Address to the people of Kazakhstan, now small and medium-sized businesses are going through difficult times, in fact, having taken the brunt of the pandemic. To overcome the negative economic consequences, tax breaks were provided to more than 700 thousand entrepreneurs. Deferred payments, given the opportunity to refinance loans on favorable terms. However, the situation is still difficult. In order to provide additional assistance to small and medium-sized businesses, the Head of State instructed to provide state subsidies for interest rates of up to 6% per annum on all existing loans to SMEs in the affected sectors of the economy. The subsidy will cover a period of 12 months from the moment of the announcement of the state of emergency, that is, from March 16 of this year.

“The National Bank is implementing a special working capital replenishment program for SMEs in the most affected sectors. Previously it was assumed that it will complete its operation this year. In the current crisis conditions, I instruct to extend this program until the end of 2021, as well as expand its coverage. For these purposes, an additional 200 billion tenge should be provided, bringing the total volume of the program to 800 billion tenge,” Tokayev also instructed.

At the same time, the Head of State ordered to suspend until the end of the year the charging of rent for SMEs on real estate objects owned by government agencies and the quasi-public sector.

“In the current conditions, maintaining employment and incomes of the population is an absolute priority. Therefore, it is important for this time to reduce the burden on the wages fund for SMEs in the most affected industries. For this category of business I am instructing to cancel deductions from wages to extra-budgetary funds for a period until the end of the year,” the President of the country noted.

The next question that Kassym-Jomart Tokayev raised in his Address is the business climate. According to the President, this area needs reforms, since the regulatory system remains cumbersome, even punitive.

“The basic principles of regulatory policy must be changed. State regulation can only be justified by protecting the health of citizens and the environment. Legislatively and in practice, the predominance of essence over form should be fixed: common sense and content can prevail over strict legal norms. The three-year moratorium on inspections provides a good opportunity to introduce such regulation from scratch. We should start with the most corrupt spheres: architectural and construction activities, sanitary and epidemiological supervision, veterinary medicine, certification and others. I am instructing you to develop a new regulatory framework for small and medium-sized businesses over the next year. I repeat: any illegal interference by state structures in business activities, obstructing the work of businessmen should be perceived as a grave crime against the state. Businessmen in case of illegal pressure on them by officials should feel free to contact the prosecutor's office,” the President ordered.

Speaking about the new regulatory framework for small and medium-sized businesses, the Head of the NCE “Atameken,” Ablai Myrzakhmetov, noted in one of his recent interviews that they have been working on this for six months.

“Back in January, the President set such a task. We called it “smart regulation”, but I think that the concept “clean” is more accurate. Smart is the use of digitalization, a system of risks. Our regulation is cumbersome, many norms, standards, technical regulations are based on the Soviet legacy. We tried to patch them up, improve them. To create a state regulation base from scratch, you need to abandon a bunch of codes, laws and licenses. We looked at the experience of Georgia, the Baltic states and the Eastern European countries, which 30 years ago started from the same field, left the Soviet Union and went their own way. Their practice shows that there is no need to complicate legislation. And we have a law, a bunch of bylaws are being adopted to it, in which officials are already laying certain "mines." It is especially hard for small businesses, they are unable to track them and run to different departments. The rules are written in such a way that the whole process is closed on receiving some piece of paper, the issuance of which depends on the will, subjectivity of certain officials. That is, you have to go around in a circle for papers. We need to write rules based on business activities. Simple and straightforward. Digitize the entire process. And then, the data will run, and not a businessman, he will be able to receive all services in a mobile application. This is the first thing. The second is the revision of the Tax Code. Most of the life cycle of a business, large and small, depends on regulation and taxes,” said Myrzakhmetov.

According to the Head of “Atameken,” the Tax Code will have to be rewritten from scratch based on the principle of rationality, good faith and ease of perception by both tax authorities and payers. There are 12 types of taxes and more than 30 payments, which in total give more than 40. It is planned that some types of taxes will be combined. For example, combining four or five payments from the payroll in a single social tax. According to experts, this would simplify administration; make life easier for an entrepreneur who cannot afford a large number of accountants. Would eliminate the corruption field for tax inspectors. In general, taxes will be combined and rates will be revised.

In addition, the Head of State noted that support for entrepreneurship also means special attention to medium-sized business, which contains the key components of market success.

“Such companies should be focused not only on domestic but also on foreign markets. Their export support should be strengthened. I instruct the Government to launch an export acceleration program aimed at medium-sized non-resource enterprises in order to provide targeted support from idea to result. The main result of the work on the development of SMEs should be an increase by 2025 of its share in GDP to 35%, and the number of employed - up to 4 million people,” Tokayev said in his message.

As the head of “Atameken” noted, the instructions of the President are serious and big work. And there will be no quick effect within a month, half a year. According to Ablai Myrzakhmetov’s forecasts, regulation from scratch will take about a year, according to the Tax Code - at least until the end of next year.

“These are fundamental things, you cannot count on quick adoption. If we launch them from 2022, it will be a great success,” Myrzakhmetov said.

In turn, the Prosecutor General, Gizat Nurdauletov, with a visit to Pavlodar region, got acquainted with the progress of the pilot project to agree on key decisions at the stage of pre-trial investigation. This project is being implemented as part of the execution of the order voiced in the President’s Address on the approval of decisions by prosecutors from 2021 that affect the constitutional rights of citizens.

During the pilot, the approval takes place in electronic format, which ensures the immediate suppression of violations and excludes the involvement of conscientious citizens in the orbit of the criminal process. Currently, such a mechanism is being tested in the Pavlodar region and the East Kazakhstan region. From October 1 of this year all regions of the country will join it. In this regard, the heads of the territorial prosecutor's offices have been tasked with taking exhaustive measures to suppress violations of the law and bring the perpetrators to justice.

In addition, as part of the trip, the Prosecutor General held a meeting with the participation of the regional Akim and the leadership of the region's law enforcement agencies on the fight against crime and the prevention of offenses.

At the same time, the Ombudsman for the Protection of the Rights of Entrepreneurs of Kazakhstan, Rustam Zhursunov, on his Facebook page noted that at a recent conference call at the General Prosecutor's Office a significant event took place in protecting business, which was also attended by representatives of the regional chambers of entrepreneurs “Atameken” and regional prosecutors.

“I talked about the many systemic problems that exist in the field of land relations and architecture, about the complaints of entrepreneurs against the actions of the tax authorities related to their filing lawsuits with the courts to invalidate transactions. The number of such claims is only growing from year to year. In recent years, we have seen practically zero statistics on criminal and administrative cases related to the obstruction of entrepreneurial activity. Articles 365 of the Criminal Code and 173 of the Administrative Code do not work. He spoke about the problem of business access to land resources, when entrepreneurs are actually limited in obtaining land plots due to the lack of detailed planning projects or outdated general plans of settlements. He also suggested that the prosecution authorities conclude joint action plans with the regional chambers of entrepreneurs to coordinate actions in the most problematic areas - this will provide proactive protection of business,” Zhursunov wrote on social networks.

He also noted that during the conference call, Deputy Prosecutor General of the Republic of Kazakhstan, Bulat Dembaev, instructed the prosecutors of the regions and those equated to them before receiving the Prosecutor General’s instructions to strengthen supervision:

- take personal control over the consideration of entrepreneurs’ appeals in the prosecutor’s office;

- conduct a qualitative analysis and revision of business applications to establish systemic issues requiring the intervention of the prosecutor’s office;

- based on the results of consideration of the appeal and inspections, take measures of prosecutorial supervision or response with the raising of the issue of the responsibility of the guilty officials (up to criminal).

For non-fulfillment, as well as improper execution of the act of prosecutor’s supervision, it is in principle to raise the question of the responsibility of the first head of the state body under Article 667 of the Code of Administrative Penalties.

He also instructed to take personal control over the high-quality implementation of the Roadmap measures for the protection of business, concluded between the NCE and the General Prosecutor’s Office, and make reasonable proposals to the draft Roadmap for the coming year.

“Thus, business gets the opportunity to remain in the economic turnover, to further contribute to the development of the economy. I am sure that joint work aimed at solving problems will bear fruit. It is gratifying that the General Prosecutor's Office is carrying out systematic and effective work to reduce pressure on business in the framework of the order of the Head of State given on September 1 as part of the annual message,” wrote Rustam Zhursunov.

As a reminder, the President of the Republic of Kazakhstan, Kassym-Zhomart Tokayev, in his message to the people of Kazakhstan on September 1, ordered additional assistance measures for SME owners:

Providing government subsidies up to 6% per annum on all existing loans to SMEs in the affected sectors of the economy. The subsidy will cover a period of 12 months, starting from the moment of the announcement of the state of emergency in the country - from March 16 of this year.

Extension of the special program of the National Bank to replenish working capital for SMEs in the most affected sectors until the end of 2021.

Suspension of charging rent for SME owners, for real estate objects owned by government agencies and the quasi-public sector, until the end of this year.

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