Tax benefits for social entrepreneurship: how the government supports businesses that change people’s lives in Kazakhstan

Social entrepreneurship in Kazakhstan is reaching new heights thanks to a set of special tax and legislative measures, as outlined by Minister of Labor and Social Protection Serik Shapkenov. Below, we explore the key benefits that help businesses tackle pressing social issues while receiving significant support from the state.

Main idea of social entrepreneurship 💡

Minister Shapkenov emphasized that social entrepreneurship is not about boosting profits—it’s about using business as a powerful tool to solve specific social problems or to support vulnerable groups of the population. Such ventures can be founded by people with disabilities themselves, or by entrepreneurs who employ individuals with disabilities or those from socially disadvantaged categories.

Tax benefits and incentives

• 1. Exemption from multiple taxes:
  Organizations with more than 51% of employees who have disabilities are exempt from corporate income tax, social tax, and land tax, and also enjoy property tax benefits.
• 2. Reduced taxable base:
  
  • 🔹 When donating property (for example, to non-profit organizations) or providing charitable assistance, the taxable income can be reduced to 4%.
  • 🔹 Lower tax burden at twice the amount of wages paid to employees with disabilities, plus a 50% reduction in social tax on those wages.
  • 🔹 Individuals with disabilities are fully exempt from paying personal income tax up to 882 times the monthly calculation index (up to 2.4 million tenge per calendar year).
• 3. Government procurement:
  According to Kazakhstan’s law on public procurement, certain goods, works, and services are purchased exclusively from companies that employ people with disabilities.

New legislative framework

Recently, the Senate of the Parliament approved a law on social entrepreneurship designed to establish a clear definition of this sector and the criteria for classifying enterprises as social businesses. This move will streamline government support measures and promote the culture of social entrepreneurship more effectively throughout the country.

Why is this important?

• 🔹 Financial stability: Tax benefits enable social enterprises to use their funds more efficiently and direct additional resources toward social objectives.
• 🔹 Attracting investors and partners: A well-defined legal framework and incentives make these ventures more appealing for investments and collaborations.
• 🔹 Inclusivity: Supporting the employment of people with special needs and socially vulnerable groups provides them with opportunities for professional growth and a sustainable income.

Tax incentives, along with new legal mechanisms, are creating a supportive environment for social entrepreneurship in Kazakhstan. Not only does this help businesses grow, but it also addresses critical social issues—from employing people with disabilities to launching charitable initiatives. Through this synergy, society gains tangible benefits, while businesses receive additional support and recognition.