The government said the announcement of plans to increase VAT to 25%


The Ministry of Finance has proposed to raise the VAT, with a simultaneous reduction of social security contributions, and such an idea is not considered in the government, told TASS Deputy Finance Minister Airat Farrakhov.

“Moreover, in accordance with the decision of the President until 2018, these issues are not addressed,” — said the Deputy Minister.

He added that this issue can be discussed only at the expert level. “So at the expert level can be discussed completely different issues. Nevertheless, the official — no,” said Farrakhov.

The head of audit chamber Tatyana Golikova, in turn, called the possible increase in VAT to 25% “of the running in the media bajka”. According to her, it is “impossible”.

And adequately lower premiums is also impossible. This will mean that should increase the transfer to the Pension Fund of the Russian Federation, and all our previous policies and those bills that were passed, they were aimed at reducing the dependence of the pension system from the Federal budget,” he said to journalists on the sidelines of the Congress of the party “United Russia” (quoted by TASS).

That the government considered the proposed MOF the idea of the simultaneous increase in VAT and the reduction of insurance premiums, earlier reported by Vedomosti and Bloomberg, citing sources. The interlocutors of “Vedomosti” argued that such a measure could provide support to domestic producers. While Bloomberg noted that none of the tax changes is not considered in the budget for the coming year. Iconic Agency “Interfax”, in turn, reported that VAT could rise to 25% (now 18%), and contributions drop to 20% (General rate is 30%).

“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”, — explained the interlocutor of “Interfax”.

The Wall Street Journal in may of this year, citing several Russian officials also reported that the Russian authorities are discussing plans to change the tax system after the presidential elections in 2018. Among these changes the newspaper’s sources called a possible increase in VAT.