ALMATY (Reuters) – Kazakhstan might help fiscal consolidation by elevating some tax charges together with VAT and should must additional elevate rates of interest, the Worldwide Financial Fund mission to the Central Asian nation mentioned on Wednesday.

The oil-rich nation has historically maintained comparatively low tax charges in areas straight affecting its inhabitants – it has a flat 10% private earnings tax and a 12% commonplace worth added tax (VAT).

However with a purpose to scale back its dependence on oil income, the nation ought to think about elevating these taxes, IMF mission head Nicolas Blancher informed a briefing.

“We expect that with a purpose to comply with this oath (of fiscal consolidation) there’s a want to think about rigorously the stability between elevating taxes and limiting expenditures,” Blancher mentioned.

“On the tax aspect, we imagine there’s scope to regulate taxation… we predict specifically there are potential advantages to broadening the tax base, to eradicate some tax exemptions, but in addition to lift some tax charges, specifically the VAT.”

With reference to financial coverage, Blancher mentioned additional tightening may very well be required to tame inflation which is anticipated to succeed in 8.5% this yr, effectively out of the authorities’ 4-6% goal vary.

“Extra could be wanted in December and maybe early subsequent yr,” he mentioned, referring to the central financial institution’s upcoming coverage assembly subsequent month.

He additionally mentioned the IMF was involved concerning the speedy development of loans to households.

Blancher mentioned the IMF noticed Kazakhstan’s financial development at 3.7% this yr after shrinking 2.6% in 2020. The IMF had beforehand forecast 2021 development of three.3%.