Horizontal Monitoring Pilot Project in Kazakhstan

According to international experts, tax monitoring has been recognised as an example of the best international practice in building digital interaction between the state and business.  A number of countries have already moved to monitoring as a form of tax control based on the principles of mutually beneficial cooperation, trust and transparency.

Kazakhstan has also launched a horizontal monitoring pilot project, which is one of the promising areas of interaction between business and tax authorities of Kazakhstan.

This horizontal monitoring regime will allow taxpayers:

• to avoid penal sanctions following the results of tax audits
• to automate interaction with the Tax Committee and reduce the cost of document flow;
• HM regime also provides an opportunity to receive explanations how to apply the tax laws in specific situations.

A horizontal monitoring pilot project is mandatory for certain categories of taxpayers and is available for some other categories.

Preparation for joining the horizontal monitoring provides that the taxpayers carry out the works in the following areas:

1. Building (improvement) of the internal control system (ICS) for the purposes of horizontal monitoring.
2. Regulation and automation of the process of tax reports generation, including tax registers.
3. Arrangement of extended information interaction between the taxpayer and tax authority.

KPMG performs a complex of “full cycle” works, which covers the following areas:

1.  Survey of the company's readiness to participate in a horizontal monitoring pilot project.
2. Building (updating) the risk management system and system of internal tax controls.
3. Methodological support of the company in the process of automation of information interaction with the tax authority.
4. Automation of information interaction with the tax authority using the Tax Data Mart.

If you have any questions, please do not hesitate to contact us - we will be happy to answer all questions as soon as possible.

1. KPMG has its proprietary software solution – Tax Data Mart software - to interact with tax authorities without involvement of an IT integrator.
2. KPMG, being a global company, has vast extensive experience in supporting the transition to tax monitoring in the CIS member countries and can share the accumulated experience to implement a pilot project in Kazakhstan.
3. Teams of experts in the area of Kazakhstan taxation, internal control systems and IT technologies pool their knowledge and accumulated experience to successfully implement the horizontal monitoring in Kazakhstan.
4. KPMG also has successful international experience in organising information interaction with tax authorities, and experience in implementing Tax Data Mart software and its integrating with SAP, Oracle, 1C and other systems.
5. In 2021, a Memorandum of Understanding and Cooperation was signed between KPMG and the State Revenue Committee of the Ministry of Finance of the Republic of Kazakhstan to introduce the institute of horizontal monitoring in Kazakhstan. Therefore, KPMG has been actively working in the following areas:

• Holding of the informational seminars/webinars for taxpayers in Kazakhstan that are joining or intend to join a horizontal monitoring pilot project;
• Finalising the draft legislative (regulatory legal) acts of Kazakhstan to improve legislation on introduction of the institute of horizontal monitoring, given the global best practices;
• Providing assistance to taxpayers in Kazakhstan in their joining a horizontal monitoring pilot project, in particular, providing assistance in preparing the information systems of accounting and tax accounting of taxpayers, internal control systems, as well as in developing and implementing the information system for interaction with tax authorities on horizontal monitoring issues;
• Implementing other forms of cooperation.