The impact of tax reforms on household income: case studies of Kazakhstan and Turkey

Amidst global macroeconomic instability, tax policy is evolving from a mere fiscal tool into a critical mechanism for regulating household income and social equity in developing economies. This research presents a comparative analysis of tax reforms in the Republic of Kazakhstan and the Republic of Turkey during the 2024–2026 period, focusing on their divergent impacts on disposable household income. The primary objective is to evaluate the socioeconomic consequences of structural changes in Tax Codes, specifically scrutinizing Kazakhstan’s transition to a progressive Personal Income Tax scale and Turkey’s indexation policies under hyperinflation. The study’s main directions involve a quantitative assessment of “fiscal drag,” the “bracket creep” phenomenon, and a comparative calculation of the tax wedge in both jurisdictions. The scientific significance lies in uncovering the latent mechanisms by which nominal wage growth in high-inflation environments results in a hidden increase in the tax burden. Practically, the work assesses specific risks for the middle class and wage earners arising from the interplay of inflation and static tax thresholds. The value of this research consists of a novel comparative assessment of two distinct fiscal strategies: planned structural fiscal adjustments involving VAT hikes in Kazakhstan versus adaptive crisis management in Turkey. The empirical findings offer objective baseline guidelines for state authorities to dynamically adjust social tax parameters and indexation thresholds to mitigate adverse shocks on real household income.

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