The mechanism of introducing the institution of bankruptcy of natural persons is being developed In Kazakhstan. According to explanations of the State Revenue Committee (SRC) of the Ministry of Finance, the draft concept of the new Law "On restoring solvency of citizens' will be considered by the interdepartmental commission in March 2016.
Now the document is being coordinated with the concerned state bodies. It is noted that the discussion is held with participation of the World Bank experts.
“In order to avoid an excessive burden on the courts there will be a combination of extra-judicial and judicial procedures, which together will represent a single process of restoration of solvency”, – the SRC explained some aspects of the draft law.
And to prevent ‘enterprising’ people of Kazakhstan from using the law to their own benefit, the officials have developed a number of protective measures.
“In order to prevent abuse of the procedure by mala fide debtors the draft law provides for mechanisms for detection of fraud and subsequent refusal to release such debtors from debt” – the Committee assured.
The Department was not able to tell the number of potential bankrupts, but presented data on tax arrears.
“In particular, on 1 January 2014 a tax debt of individuals amounted to KZT 3.5 billion, including arrears – KZT 2.1 billion. On 1 January 2015 the amount of tax debt amounted to KZT 9.8 billion, including arrears – KZT 7.4 billion” – the SRC noted.
However, according to the National Bank, on 1 January 2014 loans of individuals amounted to KZT 3.3 trillion. By 2015, the amount increased by KZT 410.8 billion.
“In 2014 under enforcement proceedings 92.6 thousand court orders were returned unenforced to the amount of KZT 999.6 billion”, – the State Revenue officials concluded.
It should be recalled that in August 2014 the Head of State instructed that the institution of bankruptcy of physical persons should be established in Kazakhstan. The bankruptcy of citizens was supposed to become effective from 2017 or 2018.
Later, the Minister of Finance Mr. Bakhyt Sultanov suggested that the bill may be submitted to the Parliament in autumn 2016.
Name of “MinTax” used in this proposal, depending on the context, can refer to MinTax LLP or MinTax Audit LLP and to its structural subdivisions as well. MinTax LLP and MinTax Audit LLP are included into MinTax Group acting on the basis of the Partnership Agreement, and are considered to be separate and independent legal entities founded under the Republic of Kazakhstan legislation, and they are responsible for all rights and obligations only on their behalf. The Companies which are included in MinTax Group are not responsible for any actions or omissions of each other
CONFIDENTIALITY | LEGAL ASPECTS