Identifier
Created
Classification
Origin
08ASTANA1965
2008-10-03 07:28:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Astana
Cable title:
KAZAKHSTAN: YOUNG, WESTERN-EDUCATED OFFICIAL
how-toVZCZCXRO7871 OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLH RUEHLN RUEHLZ RUEHPOD RUEHPW RUEHROV RUEHSR RUEHVK RUEHYG DE RUEHTA #1965 2770728 ZNR UUUUU ZZH O 030728Z OCT 08 ZDK FM AMEMBASSY ASTANA TO RUEHC/SECSTATE WASHDC IMMEDIATE 3505 INFO RUCNCIS/CIS COLLECTIVE 0662 RUEHZL/EUROPEAN POLITICAL COLLECTIVE RUCNCLS/SOUTH AND CENTRAL ASIAN COLLECTIVE RUEHAK/AMEMBASSY ANKARA 2190 RUEHBJ/AMEMBASSY BEIJING 0065 RUEHKO/AMEMBASSY TOKYO 0774 RUEHIT/AMCONSUL ISTANBUL 0027 RUEAIIA/CIA WASHDC RUEATRS/DEPT OF TREASURY WASHDC RHEFAAA/DIA WASHDC RUEKJCS/JOINT STAFF WASHDC RHEHNSC/NSC WASHDC 0220 RUEKJCS/SECDEF WASHDC 0142 RUEHBS/USEU BRUSSELS RUEHVEN/USMISSION USOSCE 1949
UNCLAS ASTANA 001965
SENSITIVE
SIPDIS
STATE FOR SCA/CEN
E.O. 12958: N/A
TAGS: PGOV PINR ECON EFIN KZ
SUBJECT: KAZAKHSTAN: YOUNG, WESTERN-EDUCATED OFFICIAL
NAMED TO HEAD TAX COMMITTEE
UNCLAS ASTANA 001965
SENSITIVE
SIPDIS
STATE FOR SCA/CEN
E.O. 12958: N/A
TAGS: PGOV PINR ECON EFIN KZ
SUBJECT: KAZAKHSTAN: YOUNG, WESTERN-EDUCATED OFFICIAL
NAMED TO HEAD TAX COMMITTEE
1. (U) Sensitive but unclassified. Not for public Internet.
2. (U) Daulet Yergozhin was named chairman of the Ministry of
Finance's Tax Committee on October 1. The 32 year-old
Yergozhin, a fluent English speaker who received an MBA from
Suffolk University in Massachusetts in 2003, had been vice
minister of finance since January 2007. He replaces Nurlan
Rakhmetov, who resigned on September 22 following the arrest
on corruption charges of the deputy head of the Almaty city
tax department.
3. (SBU) As vice finance minister, Yergozhin had strong views
on taxation issues and was not afraid to express them
publicly or privately. He was a proponent of several recent
taxation initiatives which were aimed at enabling the
government to capture a greater proportion of the profits
from the national resources sector. One of these initiatives
-- a mineral extraction tax -- was incorporated into the
draft of a new tax code currently under consideration in
parliament. Yergozhin also called for an export duty on
metals -- an idea the government dropped following pushback
from the powerful metals lobby. In a July 2008 meeting in
Astana with U.S. Treasury Department officials, Yergozhin
described as "unconstitutional" the fixed tax regimes
incorporated into existing production sharing agreements
(PSAs) with international oil companies.
4. (SBU) COMMENT: We worked closely with Yergozhin during
the summer of 2007, when there was a virtual shutdown of U.S.
exports to Kazakhstan which was caused by a legislative
change requiring Kazakhstani importers to provide a shipper's
document that could not legally be obtained from U.S.
exporters. While we had to go well above Yergozhin's level
to resolve what ultimately became a customs crisis -- with
over $100 million in U.S.-origin goods stuck in Kazakhstani
customs warehouses -- we found him open, responsive, and
professional. While on paper Yergozhin's new position is a
demotion -- since he will now report to a vice finance
minister -- as a practical matter, it is a step up, an
opportunity for him to put policy into practice as the
country's lead tax collector. As Tax Committee chairman, he
will also have the authority to initiate amendments to the
tax code. We expect the bold and ambitious Yergozhin, a
representative of the new generation of young,
western-educated Kazakhstani bureaucrats, to be more
aggressive, while at the same time more transparent and
professional, than his predecessor. He was likely selected
for this job for these very qualities. END COMMENT.
HOAGLAND
SENSITIVE
SIPDIS
STATE FOR SCA/CEN
E.O. 12958: N/A
TAGS: PGOV PINR ECON EFIN KZ
SUBJECT: KAZAKHSTAN: YOUNG, WESTERN-EDUCATED OFFICIAL
NAMED TO HEAD TAX COMMITTEE
1. (U) Sensitive but unclassified. Not for public Internet.
2. (U) Daulet Yergozhin was named chairman of the Ministry of
Finance's Tax Committee on October 1. The 32 year-old
Yergozhin, a fluent English speaker who received an MBA from
Suffolk University in Massachusetts in 2003, had been vice
minister of finance since January 2007. He replaces Nurlan
Rakhmetov, who resigned on September 22 following the arrest
on corruption charges of the deputy head of the Almaty city
tax department.
3. (SBU) As vice finance minister, Yergozhin had strong views
on taxation issues and was not afraid to express them
publicly or privately. He was a proponent of several recent
taxation initiatives which were aimed at enabling the
government to capture a greater proportion of the profits
from the national resources sector. One of these initiatives
-- a mineral extraction tax -- was incorporated into the
draft of a new tax code currently under consideration in
parliament. Yergozhin also called for an export duty on
metals -- an idea the government dropped following pushback
from the powerful metals lobby. In a July 2008 meeting in
Astana with U.S. Treasury Department officials, Yergozhin
described as "unconstitutional" the fixed tax regimes
incorporated into existing production sharing agreements
(PSAs) with international oil companies.
4. (SBU) COMMENT: We worked closely with Yergozhin during
the summer of 2007, when there was a virtual shutdown of U.S.
exports to Kazakhstan which was caused by a legislative
change requiring Kazakhstani importers to provide a shipper's
document that could not legally be obtained from U.S.
exporters. While we had to go well above Yergozhin's level
to resolve what ultimately became a customs crisis -- with
over $100 million in U.S.-origin goods stuck in Kazakhstani
customs warehouses -- we found him open, responsive, and
professional. While on paper Yergozhin's new position is a
demotion -- since he will now report to a vice finance
minister -- as a practical matter, it is a step up, an
opportunity for him to put policy into practice as the
country's lead tax collector. As Tax Committee chairman, he
will also have the authority to initiate amendments to the
tax code. We expect the bold and ambitious Yergozhin, a
representative of the new generation of young,
western-educated Kazakhstani bureaucrats, to be more
aggressive, while at the same time more transparent and
professional, than his predecessor. He was likely selected
for this job for these very qualities. END COMMENT.
HOAGLAND