1. Clarification on raising the minimum wage and excluding its reference to the subsistence minimum
Under the instruction of the President of the Republic of Kazakhstan from January 1, 2019, the minimum wage (MW) is increased by 1.5 times, the establishment of the MW will not be tied to the minimum subsistence level. Since the new year, the MW will be 42 500 KZT.
At the same time, the value of the subsistence minimum (SM) will no longer be the basis for the establishment of the MW, while the principle remains - the MW cannot be lower than the SM.
As a result of the increase in the MW, the disposable income of more than 6 million employees will grow to 15 thousand KZT per year only by increasing the amount of tax-exempt income.
Taking into account that, the MW remains the role of the minimum standard wage of the employee, for more than 1 million citizens of Kazakhstan (with low wages), the growth of wages will reach up to 50% to the level of 2018.
All legislative amendments adopted within the framework of the Law "On amendments and additions to some legislative acts of the Republic of Kazakhstan on issues of population employment" are aimed primarily at increasing the income and quality of life of every citizen of Kazakhstan.
2. Regarding changes on the issue of payment of mandatory pension contributions of "freelancers" -from the income of individuals performing work or providing services under contracts of a civil nature.
The amendments provided in the Law also concerned the issue of payment of mandatory pension contributions (MPC) by "freelancers".
These amendments are aimed at simplifying the procedure for payment of MPC, and take into account the opinion of the majority of representatives of this category of working citizens, representatives of the Deputy corps and a number of legal entities practicing the involvement of "freelancers" for certain types of work/services.
Relevant Rules will be amended in the implementation of the legislative amendments adopted in the first quarter of 2019.
Thus, citizens who combine work as employees (within the framework of individual employment contracts) and perform work/services under contracts of a civil nature (contracts of CN) with individuals will be exempt from the obligation to pay MPC from income under contracts of CN.
Legal entities, individual entrepreneurs and persons engaged in private practice, which today are tax agents, calculating and paying individual income tax, are obliged to pay MPC for individuals ("freelancers") performing work/services under contracts CN.
At the same time, individuals who perform work/services under CN contracts concluded with individuals retain the right to participate in the funded pension system by self-payment of MPC in their favor.
3. Regarding the opening of individual pension accounts in the Unified accumulative pension fund on a "non-declarative" basis
The next positive news regarding the participation of citizens in the accumulative pension system is the simplification of the procedure for opening an individual pension account (IPA) in the Unified accumulative pension fund (UAPF) for new depositors of mandatory pension contributions (MPC), also provided for under this Law.
If in accordance with the current legislation (before the amendments from December 27, 2018) for the opening of IPA in the UAPF individuals need to personally apply to the branch of the UAPF with an application for the opening of IPA at the expense of MPC, the new mechanism of IPA in the UAPF for new depositors will be opened automatically – on the basis of the first contribution received in the UAPF.
This mechanism for the "non-declarative" opening of IPA at the expense of MPC will work from the moment of the introduction of amendments to the Pension rules of the Unified accumulative pension fund, the adoption of which is expected in the first quarter of 2019.
At the same time, all the necessary information about the details of the current document certifying the identity of the depositor on the MPC, the place of permanent residence, etc., UAPF will receive from the information systems of state bodies.