The problem is the ambiguity of the Kazakhstan Tax Code’s provisions on notifying tax authorities about receiving and spending funds from foreign donors. The current legislation provides for responsibility for providing "false" information, where "false" includes providing incorrect information due to honest mistake and even malfunctioning of the tax authorities' reporting system. As a result, the NGOs found themselves in a vulnerable position where the tax authorities effectively can fine them for providing “false” information at any time, and suspend their activity for up to three months. Action came after the NGO published information on corrupt and suspicious payments made by the Kazakh government.
ILP provided support to a Nur-Sultan based fiscal reform NGO whose senior managers were arrested by Kazakh tax authorities. Authorities were threatening to fine our client and other governance NGOs by taking an extreme interpretation of newly introduced obligations on reporting foreign funding.
ILP’s lawyers supported the civil society leaders through their arrest and trial, leading to the charges, fines and court action being dropped. We subsequently supported the affected NGOs to draft an amended reporting obligation to prevent future harassment and abuse of legislation against civil society