The Mohican Mediator

Resellers who mark up agricultural products are an inevitable evil of the current tax system. But the state, we will believe, is gradually getting rid of them.

Chairman of the Trade Committee of the Ministry of Trade and Integration Aidar ABILDABEKOV opened everyone's eyes at a briefing at the Central Communications Service to why vegetables and fruits grown in our own republic are becoming much more expensive in retail chains. But here's the strange thing: why do so few people see this?

According to him, since all Soviet systems of district consumer unions and procurement offices collapsed, farmers have been able to sell their products on the market in the most convenient ways for them. But there is an unpleasant nuance for the consumer. Only large producers pay the value added tax (VAT). But small farms and private subsidiary farms are not VAT payers and, accordingly, sell goods without documents, simply selling them on the market.

- But at the same time, our large retail chains are VAT payers, and this is where difficulties arise, - noted Abildabekov. - That is, a farmer, selling potatoes for 250 tenge, does not want to issue an invoice and pay VAT. Accordingly, the chain cannot buy these potatoes from him directly, and here an intermediary appears who buys these potatoes, pays VAT, pays corporate income tax on his margin and then supplies these products to the retail chain. Therefore, some retail chains, unless they have previously contracted or purchased products by paying in advance, that is, with a forward or futures contract, end up purchasing the goods upon receipt.

At the same time, he emphasized that farmers work in accordance with the norms of the current Tax Code. Each trader has the right to choose his own tax regime. That is, he can work under a simplified system (under the relatively recently adopted retail tax), or he can be a VAT payer and work in the generally established manner.

- In general, the fight against intermediaries is being carried out very actively, - at the same time, the head of the trade committee assured. - For comparison, I can say that when this competence was with local executive bodies, 18 akimats drew up 490 protocols for bringing intermediaries to administrative responsibility in 2022, of which 310 were drawn up for trade markups. And this work was carried out because in 2022, a trade committee was created, and we began to coordinate the activities of all government agencies involved in price stabilization. In 2023, this figure was 1,008 protocols, of which 760 were for exceeding the trade markup. That is, the figure has more than doubled. In 2024, 4,384 entrepreneurs were already brought to account for exceeding the trade markup. Since the beginning of this year, we have brought 691 entrepreneurs to administrative responsibility. At the moment, 79 materials are in progress.

At the same time, Abildabekov reported that the ministry is particularly monitoring the issue of market modernization. In general, it began 10 years ago, when amendments were made to the law on regulating trade activities, obliging owners of open flea markets to move them into buildings by 2020. However, the deadlines were then shifted: for the regions - until 2025, and for the cities of Astana, Almaty and Shymkent - until 2023.

- However, the modernization of the markets was not completed on time due to insufficient control by the akimats, as well as for a number of other objective reasons, such as the rise in the cost of building materials due to the pandemic. The deadlines were postponed three times, - said the representative of the Ministry of Trade. - Today, the legislation sets a single deadline for modernization for all trade markets - until December 31, 2025. A roadmap has been developed and approved. According to the Bureau of National Statistics, there are 644 markets in the country. Of these, 412 are universal, 233 are specialized. Modernization of 100 markets is planned for 2025.

To assess the condition of the markets, the Ministry of Trade has approved a schedule of visits to them in February and April of this year. A detailed inventory of markets in all regions is planned. This work is being carried out jointly with akimats, representatives of state revenue agencies, emergency situations, state architectural and construction control and sanitary and epidemiological control.

And from January 1, 2026, owners of trading markets who fail to ensure modernization within the established timeframes will be subject to administrative liability in accordance with the legislation on administrative offenses.

Vladislav SHPAKOV, photo by Vera OSTANKOVA, Astana