Budget policy of Republic of Kazakhstan Printable versionLast update: 05.04.2020
Since gaining independence, Kazakhstan has gone a long way of becoming and improving the budget process, from 1991 to 1993 can be characterized as the stage of the origin of the budgetary system.
On December 17, 1991 the first Law "On the Budget System" was adopted, which determined the procedure for the formation of the republican and local budgets, as well as the procedure for the relationship of legal entities and individuals with the budget for the payment of tax payments.
The next period from 1993 to 1997 is the establishment of the budget system of Kazakhstan, characterized by the development and implementation of a new budget classification in accordance with international standards.
During these years, large economic reforms were carried out in the country related to the tax legislation, the structuring of the executive bodies of power, and the adoption of the second Law "On the Budget System" of December 24, 1996.
In the period from 1998 to 2003, the budget system was reformed, the public sector analysis was carried out, on the basis of which organizations financed from the budget were optimized.
With the adoption of the third Law "On the Budget System" of April 1, 1999, the distribution of receipts and expenditures between the republican and local budgets was legislatively approved, then followed the process of modernization of the budget system, which was marked by the adoption of the first Budget Code of April 24, 2004.
It merged the previously functioning laws ("On the Budget System", "On State and Guaranteed Borrowing and Debt", "On Control over the Execution of the Republican and Local Budgets") regulating the entire budget process.
For the first time, the Budget Code of 2004 systematized the issues of intergovernmental fiscal relations and adopted a norm on stable inter-budgetary relations for the medium-term period.
Since that time, four laws on the volume of general transfers for medium-term periods have been developed: 2005-2007, 2008-2010, 2011-2013 and 2014-2016.
In 2007, work was begun to build a qualitatively new model of public administration on the principles of corporate governance, efficiency, transparency and accountability to society. In order to form a coherent and effective system of state planning aimed at achieving strategic goals and realizing the priority tasks of the country's social and economic development, in December 2007, the Concept for the implementation of the state results-based planning system was approved.
This was reflected in the new Budget Code of December 4, 2008, aimed at creating the conditions and prerequisites for the most effective management of public finances, namely, shifting the budget process from managing budget resources to managing results.
A transition from one-year budget planning to a three-year budget was also made, which became the basis for a new model of state planning.
Since gaining independence in Kazakhstan, the foundations of a modern public financial management system have been formed.
An important reform in the budget system of Kazakhstan was the creation in 2000 of the National Fund of the Republic of Kazakhstan (hereinafter - the National Fund) in order to accumulate financial resources for future generations by saving oil revenues and reducing the dependence of the republican budget on the situation on world commodity markets. The National Fund has become an important tool for maintaining macroeconomic stability in the country.
In order to ensure the interconnection of economic, strategic and budgetary planning, a division of powers between central government bodies and levels of public administration was carried out, including in the budget system.
Work continues on improving the system of interbudgetary relations and ensuring transparency and stability, as well as strengthening the independence of each level of management in the allocation of budgetary resources.
Thus, an integrated system for regulating budgetary legal relations has been created, unified principles of the budget system have been established, a mechanism for saving oil revenues has been introduced, and a system of interbudgetary relations has been built up.
On the instructions of the Head of State, the Ministry developed and approved the Decree of the President of the Republic of Kazakhstan No. 590 of June 26, 2013, on the Concept of a New Budget Policy (hereinafter - the Concept). The concept defines the vision, the main approaches to the formation of budgetary policies until 2020, and measures aimed at ensuring the complexity of reforms in public finance.
Taking into account the development priorities for the medium and long term, the aim of the budget policy is to ensure the balance of public finances and the stability of social and economic development.
In order to ensure macroeconomic stability and balance of public finances, fiscal policy is formed on the basis of a number of fiscal restrictions, the main one being the management of the size of the budget deficit.
In general, the implementation of the Concept helps to ensure the stability of public finances, increase the effectiveness of budget expenditures, increase private investment in the economy and create favorable conditions for sustainable economic growth.
In the conditions of the new global reality, the main priority of the budget policy should be austerity of budgetary resources, rational use of the National Fund's resources and increase of efficiency of public spending.