Kazakhstan MP proposes tax breaks for struggling shopping malls amid e-commerce rise

Kazakhstan's shopping centers are facing a significant downturn, with entrepreneurs reporting a sharp decline in foot traffic and consumer activity. This trend is directly impacting retailers and the leasing business, leading to falling revenues. Business owners cite the exclusion of retail property leasing from a special tax regime as a primary cause, but the issue is compounded by the rise of e-commerce, online marketplaces, and reduced purchasing power.

Lawmakers are proposing measures to revitalize the struggling sector. Member of the Mazhilis, Azat Peruashev, has suggested introducing tax breaks for shopping centers during renovation periods. He also advocates for allowing retail property owners to utilize a special tax regime. These proposals aim to support businesses as they navigate the challenges posed by changing consumer habits and economic pressures.

Peruashev believes that shopping malls need to evolve into multifunctional public spaces to survive. This transformation could involve incorporating diverse amenities such as children's and sports zones, fitness centers, educational institutions, and expanded food courts. However, such a significant overhaul requires substantial investment. To facilitate this, the deputy proposed measures including affordable lending for renovations, state support for program participants, and standardized remodeling solutions.

The proposed reforms are intended to preserve jobs, boost the profitability of retail infrastructure, and assist shopping centers in adopting new operational formats. The initiative comes as Kazakhstan prepares to implement an updated special tax regime in 2026, which will have a list of prohibited activities, underscoring the government's efforts to adapt its economic policies.

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Shopping complexes are facing declining foot traffic, a reduction in the number of tenants, an increase in vacant space, and a drop in investment attractiveness.