On July 1, 2024, the Government of the Republic of Kazakhstan introduced amendments to the Tax Code concerning the calculation of the mineral extraction tax (MET) on uranium. These changes will impact how uranium mining enterprises in the country calculate and pay their taxes. The amendments apply to the National Atomic Company Kazatomprom (Kazatomprom), Kazakhstan’s largest uranium producer, and its subsidiaries.
Current Tax Base and Calculation (Since January 1, 2023)
As of January 1, 2023, the taxation base for MET on uranium is determined using the weighted average market price of natural uranium concentrate (U3O8) from public sources over a reporting period. The tax rate is 6% of this price, multiplied by the quantity of uranium extracted.
New Taxation Rates Starting in 2025
From January 1, 2025, a new tax rate of 9% will be applied to uranium mining for that year only, marking a temporary increase from the current 6%.
Differentiated Approach from 2026 Onward
Effective January 1, 2026, the MET on uranium will follow a differentiated approach based on annual production volumes and the market price of uranium concentrate (U3O8). The tax rates will vary according to the scale of extraction, as detailed below:
- Up to 500 tons: 4%
- Up to 1,000 tons: 6%
- Up to 2,000 tons: 9%
- Up to 3,000 tons: 12%
- Up to 4,000 tons: 15%
- Over 4,000 tons: 18%
Price-Triggered Increases in MET
In addition to the differentiated rates, MET will rise further if the average uranium price exceeds certain thresholds:
- Above $70 per pound: +0.5%
- Above $80 per pound: +1.0%
- Above $90 per pound: +1.5%
- Above $100 per pound: +2.0%
- Above $110 per pound: +2.5%
Expected Impact
These new regulations are expected to significantly affect the joint ventures and subsidiaries of Kazatomprom starting in 2026, as they will be subject to higher, differentiated taxation rates. However, the amendments to the Tax Code will not affect the company’s tax expectations for 2024.
The full text of the legal act is available in Kazakh and Russian via the following link: online.zakon.kz.
Kazatomprom remains committed to adhering to the new regulations as they come into effect, with preparations already underway to manage the forthcoming changes in tax obligations.
