Mineral extraction tax dominates environmental taxes in Kazakhstan’s oil sector

According to Aigul Mukhamadiyeva, Managing Director and Head of the Natural Resources and Agriculture Directorate of the Eurasian Development Bank (EDB), the mineral extraction tax in Kazakhstan’s oil sector accounts for more than 70% of all environmental taxes. This statement was made during the session “EDB Investment Instruments: Results and Prospects” at the EDB Annual Meeting and Business Forum in Almaty.

Photo: The mineral extraction tax dominates among environmental taxes in Kazakhstan’s oil sector

Mukhamadiyeva emphasized that the natural resources sector and the agro-industrial complex constitute a significant part of the GDP of the Bank’s member countries. In both Kazakhstan and Russia, the mineral extraction and processing sector has a decisive impact on GDP, tax revenues and economic growth. In particular, in Kazakhstan, the tax on mineral extraction from the oil sector accounts for over 70% of all environmental taxes, while extraction outside the oil sector accounts for over 14% of environmental taxes.

“Analyses show that the natural resources sector and the agro-industrial complex occupy a significant part of the GDP of the Bank’s member countries. In Kazakhstan and Russia, the mineral extraction and processing sector not only has a significant share in GDP, but is also a key source of tax revenues, as well as an important factor in the countries’ economic growth. In particular, in Kazakhstan, the mineral extraction tax in the oil sector accounts for more than 70% of all environmental taxes, while non-oil extraction taxes account for more than 14% of all environmental taxes. This is a significant amount,” Mukhamadiyeva noted.

Mukhamadiyeva also drew attention to the significant contribution of mineral extraction and processing to the economy of Kyrgyzstan. In 2023, the share of mineral resources in Kyrgyzstan’s total industrial production exceeded 11%. Although Armenia, Belarus and Tajikistan have relatively lower rates of mineral extraction and processing in their GDP, the industry remains crucial to their economies.

The final day of the annual meeting of the EDB and Business Forum in Almaty included three panel sessions and the presentation of the study “Water and Sanitation in Central Asia.”