Illegal business activity is part of the shadow economy.

Entrepreneurial activity requires corresponding government regulation. The first and basic requirement for entrepreneurship is state registration. Illegal business activity causes serious damage not only to the country, but also to entrepreneurs who are in the same bussiness. Non-receipt of taxes to the relevant budget is the first sign of the shadow economy. An important sign of entrepreneurial activity is to gain profit and income. An entrepreneur is obliged to pay taxes and other mandatory payments to the budget from the profit obtained from entrepreneurial activity. Illegal business activities have a negative impact on the economy of the Republic and on healthy competition. According to the paragraph 2 of Article 35 of the Business Code of October 29, 2015 No. 375-V of the LRK, individuals are subject to obligatory state registration as an individual entrepreneur if they meet one of the following conditions: they use the labor of employees on a ongoing basis; they gain annual income from private entrepreneurship calculated in accordance with tax legislation of the Republic of Kazakhstan, in an amount exceeding the 12 times the minimum wage established by the law on the republican budget and valid as of January 1 of the corresponding financial year.

An individual person who does not employ workers on a permanent basis, may not be registered as an individual entrepreneur in case of obtaining the following income provided for by tax legislation of the Republic of Kazakhstan "On taxes and other mandatory payments to the Budget" (Tax Code): income subject to taxation at the source of payment; property income from the sources outside the Republic of Kazakhstan; incomes of domestic workers in accordance with the labor legislation of the Republic of Kazakhstan, gaining income from persons other than tax agents; incomes of citizens of the Republic of Kazakhstan under labor contracts (contracts) and (or) contracts of a civil law nature, concluded with representative offices of a foreign state, and consular institutions of a foreign state accredited in the Republic of Kazakhstan other than tax agents; incomes of citizens of the Republic of Kazakhstan under labor contracts (contracts) and (or) civil law contracts  concluded with international and state organizations, foreign and Kazakhstani non-governmental public organizations and foundations  exempt from the obligation to calculate, withhold and transfer individual income tax at the source of payment in accordance with international treaties ratified by the Republic of Kazakhstan; incomes of resident labor immigrants received (to be received) under employment contracts concluded in accordance with the labor legislation of the Republic of Kazakhstan on the basis of a permit issued to a labor immigrant; income of mediators, with the exception of professional mediators in accordance with the Law of the Republic of Kazakhstan "On Mediation", gained from persons other than tax agents; income from a personal subsidiary farms recorded in the household register in accordance with the legislation of the Republic of Kazakhstan, subject to taxation, for which individual income tax was not withheld at the source of payment due to submission of false information to the tax agent by a person engaged in personal subsidiary farming.

Non-execution of legal requirements attracts the responsibility established by the law. 287 offenders engaged in illegal business were identified in East - Kazakhstan region in 2023, , administrative penalty was imposed on them. For example, during a thematic (raid) inspection to identify unregistered taxpayers operating in one of the markets of Ust-Kamenogorsk city, 6 taxpayers operating without registration were identified, including a resident o…