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Why ‘excessive wealth’ taxes is a bad idea: the case of Bulat Utemuratov


Laws on ‘luxury’ exist to some extent in many countries. They can be conditionally divided into progressive taxes (where the rich pay higher rates) and direct taxes, where the cost of certain groups of goods includes a surcharge because supposedly only the wealthy buy these goods. Both of these ideas are nothing more than a haircut for ordinary citizens. The threshold of wealth will continuously decrease, and in the end, any normally working Kazakhstan citizen will be considered rich. Let’s take a look of one of the riches men of the country, Bulat Utemuratov. His tax returns, base on ‘luxury’ will be next to nothing.

Bulat Utemuratov is a poor man. No taxes await him. Why? Let’s figure it out.

Who do we consider wealthy? Let’s take one of the richest and idle oligarchs of the country, Bulat Utemuratov. Ranked second or third on the Forbes list, this person has become wealthy by dealing with slippery issues of bribes, kickbacks, and capital outflows from the country to the West (and East), all while using his official position.

Bulat Utemuratov (L) and Nursultan Nazarbayev (R)
Bulat Utemuratov (L) and Nursultan Nazarbayev (R)

Currently, Bulat Utemuratov owns God knows how much and what – shares in enterprises, stock packages, real estate, a garage of luxurious cars like an Arab sheikh, hotels, a beautiful piece of France, and an unspecified number of other “luxurious” things, in the eyes of an ordinary person.

But in reality, none of this belongs to Bulat Utemuratov. As an individual, and therefore a tax subject, he is as poor as a church mouse. Everything Bulat Zhamitovich Utemuratov possesses is essentially the management company ‘Verny Capital.’ It cannot be considered luxury, and it will not appear in any ‘Verny Capital’ register. Inside the company, it is the matter of its founder, how, where, and to what extent he will earn a profit.

The private capital of oligarchs is governed by corporate law, and they will not pay any ‘luxury tax.’ Those who will be affected by populist innovations are first and foremost middle-class entrepreneurs, then simply well-functioning managers and skilled labor. And then, everyone else. Except those who conceived the law on ‘luxury’ and intend to enrich the wealthy with the money of the poor.

Written by: Harry Adams

Harry Adams is a political expert who has been working for various publications under pseudonyms for 11 years. He loves sarcasm and a rigid presentation of the material without decorations.

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