Reflections on the recycling fee in Kazakhstan

In 2016, Kazakhstan introduced a scrappage on cars (now for cars with internal combustion engine it is from 500 thousand to 3.5 million tenge), in 2019-2020 a scrappage on farm machinery (600 thousand – 13.7 million tenge), and in June 2021 – on cable (5% of its value).

Common models of cars that cost around 3 mln KZT in Kazakhstan until 2016 (for instance, Kia Rio and Hyundai Accent) are now sold in the secondary market for 5-6 mln KZT (twice the price despite the age of the car). The cost of a new model Kia Rio 2021 is from 8 million tenge.

So, why the cars became more expensive in Kazakhstan? There are several reasons for that: constant inflation, several devaluations, and, finally, the utilization fee. In fact, the scrappage fee was introduced to stimulate the domestic production, including by limiting the import.

However, we should not forget about the rates of primary registration, the amount of which is small for cars under 3 years old (up to 2 years – 0.25 MCI, from 2 to 3 years – 50 MCI). And for cars older than 3 years the size of the primary registration is 500 MCI (1,518,000 tenge in 2022).

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