KMG EP Receives $156M Tax Bill from Kazakhstan Authorities

KazMunaiGas Exploration Production (KMG EP) announced Wednesday that the Kazakhstan tax authority has charged the company an additional 38.1 billion Kazakhstani tenge ($156 million), following the completion of an audit that commenced in September 2014 for the period between 2009 and 2012.

The total charge comprises a penalty of 9.7 billion tenge ($39.8 million) for late payment, a fine of 10.2 billion tenge ($41.8 million) and an additional charge of 18.2 billion tenge ($74.7 million). KMG EP made a tax provision of 16.7 billion tenge ($68.5 million) for the period ended June 30, 2015. The company has stated that it is currently preparing its appeal to the claims and will further evaluate the adequacy of its provisions as the case progresses through the court system.

KMG EP’s net profit for the six months of 2015 was 2.9 billion tenge ($11.9 million), which was significantly lower than the net profit of 210 billion tenge ($862 million) reported for the same period in 2014. The company is currently operating with an interim CEO following the resignation of Abat Nurseitov, which was announced by KMG EP on September 8, 2015. KMG EP’s Chief Financial Officer Dastan Abdulgafarov commenced his interim CEO duties yesterday and will continue to undertake tasks associated with the role until the appointment of a new CEO.