The Ministry of Finance has proposed to reduce the insurance contributions, and at the same time to reduce the VAT rate, Bloomberg reported, citing three sources. According to one of interlocutors of Agency, this measure will help the Russian authorities to about 30% ($9 billion) of the amount that employers pay “in envelopes” (the Ministry of Finance estimates annually so the budget loses about 2 trillion rubles ($ 30.7 billion). About the plans of the Ministry of Finance to increase VAT and reduce the insurance premiums on the eve was also told “Vedomosti” on reference to several Federal officials. The sources claimed that the measure could support the domestic producer. In a press-service of the Ministry of Finance to comment on this information did not.
“This proposal stems from the desire to bring salaries out of the shadows to reduce the burden on businesses,” explained Bloomberg Vladimir Tikhomirov, chief economist at BCS Financial Group in Moscow. “The problem is that there is a flip side. The increase in VAT rates will lead to higher inflation, and this decision will indirectly affect the ruble,” he said.
As reported by the source Agency “Interfax” familiar with the preliminary calculations, to increase VAT within Finance ideas could be at least 25% of this tax is 18%, in case of realization of goods for children, printed periodicals, book products connected with education, science and culture, medical goods are subject to VAT at 10%. The export of goods refund of tax.
To reduce premiums, according to the source, unable to 20%. Currently the General rate is 30%.
More accurate calculations of the Ministry of Finance can submit to the state Duma after elections, the source said.
“The idea of a fiscal devaluation, in the EU — to increase the competitiveness of domestic production by reducing taxes on labour (VAT and excise on exports is reimbursed) and the cost of imports by raising VAT”, — said the interlocutor of “Interfax”.
“Above [the VAT rate to 25%], of course, is scary. And to make the maneuver necessary in the period covered by the three-year period. Ideally, 2017. Lower insurance premiums as well as to raise the VAT with excise taxes significantly. Up to 20% of course, unlikely, but a benchmark should be just that,” — said the source Agency.
However, as pointed out by Bloomberg, none of the tax changes is not considered in the budget for the coming year.
Earlier, in may of this year, The Wall Street Journal, citing several Russian officials reported that Russian authorities are discussing plans to change the tax system after the presidential elections in 2018. They talked about a possible increase in VAT and in addition, the introduction of a progressive income tax. “There is a debate about how to make it so that taxes didn’t look excessive and not hurt the population,” — said one of interlocutors of WSJ. In conversation with the newspaper, officials have noted that Russian authorities, while there is no consensus on raising taxes and the final decision will be taken by the political leadership of the country.