Reform insurance premiums, which involves the unification of the base for contributions, will increase the burden on large businesses in most industrial sectors. This follows from the calculation the largest three dozen companies and two industry associations, told a source close to the RSPP. Now the business pays contributions for employees in social funds by total rate of 30%, but the existing threshold base for contributions means that upon reaching certain income of the employee to pay less (see infographic). Therefore, when the abolition of thresholds, as proposed by the Finance Ministry, the burden on business will increase and to compensate for this increase, it would reduce single rate to 23 to 28% (see chart).
The Ministry has agreed only 28% passed TASS last week, and this rate is acceptable only for few companies (engineering, transport and metallurgy). The company does not name the source, because the calculation is sensitive information.
It turns out that if you cancel thresholds and reducing the total rate the company with “expensive” employees will be given to off-budget funds more, and companies that pay lower salaries, give less. “The financial sector will be forced to pay [for other industries] due to the high salaries will increase its load. The oil companies are also affected by this,” says the Director of the Institute of labour and social security Ranhigs Alexander Safonov. A source in “Business Russia” says that the number of victims can be the industry of deep processing, although they are designed to help us all move away from the commodity model of the economy. For example, petrochemistry. “One of the largest companies in the sector, with implementation of the proposal of the Ministry of Finance their costs will increase by 3 billion rubles per year”, — says the interlocutor .
LUKOIL representatives had no comment, “Rosneft”, “Gazprom”, “Norilsk Nickel” has not responded to the request. The representative of MegaFon, said the company supports the initiative of the Ministry of Finance: according to him, no threshold “is especially critical for companies engaged in innovative industries, where there is a huge need in highly qualified and therefore highly paid staff”.
Offered officials
According to the results of the Message to the Federal Assembly, President Vladimir Putin instructed until may 1, 2016 to prepare the transfer of functions of administration of insurance contributions to the conduct of “authorized Federal Executive body” — this body was identified by the FTS. The service has prepared a “road map”, which involves a transition from 1 January 2017 on the Unified social insurance collection (ESSS) instead of the existing three social security payments. But it soon became clear that a single administration of insurance premiums is not limited to: the authorities discuss the revision of the entire model of social payments.
Changing the current system will allow the Finance Ministry to concentrate all payments in one point and manage their priority. That is, if necessary at the expense of pension money to “plug a hole”, associated, for example, with the cash gaps in salary costs of state employees or funding for other projects, such administration allows the Finance Ministry to do, says Alexander Safonov.
Now there are two options, how can pass the reform. Officials of financial-economic block of the government speak about the necessity to unite contributions, since the nature of insurance payments similar to tax — actually it is about the return of the unified social tax (UST). Last week Deputy economic development Minister Stanislav Voskresensky confirmed that the government is discussing the return of the unified social tax, and also discusses the abolition of the thresholds on contributions. The Finance Ministry proposes to lower the rate to 28%, if the thresholds will be lifted, TASS reported, and confirmed by two sources in business organizations. The representative of the Ministry of Finance has not commented on the issue.
Alternative proposals is the labour Ministry, they supported the social block of the government, says a Federal official. According to him, the Ministry does not agree with the introduction of a single insurance fee, proposes to maintain the existing system of three contributions to each extra-budgetary funds and not to change the size of their total bet is 30%. But gradually increase the threshold at which the contribution is reduced, the source said . The Ministry declined to comment.
And the Finance Ministry’s proposals, and the proposals of the Ministry of labour presented to the leadership Cabinet. The two choices have to be made soon, he says, because changing the system will need to be considered when the budget for the next three years.
Load efficiency
In General, due to the cancellation thresholds, the Finance Ministry wants to collect up to 470 billion rubles in 2019 — with employers paying high wages, wrote the newspaper “Vedomosti” in mid-March. But if the overall rate will remain at 30% (calculate with 28%). In theory the reduction of the rate to 28% total revenues insurance premiums can still increase. If we calculate the wage Fund in the country, based on income for personal income tax, the increase in revenue under the new system amount to approximately 100 billion rubles According to the NRF in 2015 in the budgets of all levels was listed 2,67 trln rbl. of the income tax (excluding payments of notaries, lawyers, from the sale of property, securities and cash) that allows you to estimate the aggregate size of the wage Fund in the country in 20,53 trillion rubles If the authorities took the decision to introduce the single tax of 28% from all Fund of payment of labour on the eve of 2015, this year they could collect extra-budgetary funds of 5.75 tlrn RUB — almost RUB 100 billion more than came in them (5,66 trillion rubles, according to the Federal Treasury).
The Ministry has already submitted to the Ministry of Finance calculations, the changes in revenues to extra-budgetary funds in case of reform. To disclose details of the Agency refused, a spokesman said that had been calculated for the complete abolition of the threshold without reducing rates. “In the case of an outright cancellation of threshold rates without reducing revenues of extrabudgetary funds will increase, this will reduce other taxes in the budget system. If, as a result of this measure will be “Babysitting wages in the shadow”, the net effect for the budget system can be negative,” warns the representative office. And if you cancel thresholds and reducing the rate to 28% significant effects neither for income nor for macroeconomics in General, he says.
Losses associated with reduced rates by 2 percentage points (from 30% to 28%), the Finance Ministry does not compensate due to growth in fees from high-yield groups of such workers is too small in the scale of the whole economy, said Alexander Safonov.
But will be sectoral flows of funds. The company will reduce the compensation paid new employees to pass on them an additional tax burden, says Safonov, or even to reduce wages for existing workers. “Without the limiting values of wages and at a rate of 28.5% (I’ve heard a working version) will increase the load on high-efficiency and high-performance jobs, says PwC partner in Russia Kirill Nikitin. — Will increase costs for those positions and in those industries that we were going to develop to get away from the commodity structure of the economy”. He cites the example of the automotive industry, engineering, the information technology industry. For IT may be sustained benefits, but in the current logic of the Ministry of Finance may revoke, says Nikitin. Earlier “Kommersant” reported that in the framework of reform of the Ministry of Finance suggests to cancel not only the “ceiling” of salaries, but most of the benefits on insurance premiums.
Moscow will pay
The redistribution between the income groups and there is a geographical dimension, said Deputy Director public Finance group S&P Karen Vartapetov: in regions where well-paid employees will increasingly feel the negative effect.
“In my estimation, only in the case of implementation of this scheme will be collected 150 billion rubles more. For comparison, this is one tenth of the budget of Moscow”, — said Kirill Nikitin from PwC. In addition, he adds, these additional payments will reduce the base for income tax and profit tax on 9/10 goes to the budgets of subjects of Federation.
It turns out that the Federal and consolidated budget social funds to acquire additional income, and as a derivative — and a much smaller amount, you’ll lose some of the regional budgets in the form of income tax, and also due to the fact that in respect of the salaries of officials will increase the tax burden. Meanwhile, some deficient subjects, in theory, can its deficit be reduced through a lower single rate, explains Nikitin.
Proposed by the Ministry of Finance measure may affect a relatively weak regions: other things being equal, some businesses can go into the shadows, explains Karen Vartapetov. Then personal income tax base may SAG and in poor regions.
In response to the proposed changes, employers will be able to find ways to circumvent the load increases: the system maximum will go from “monetization” to “materialization”, said Alexander Safonov. For example, the company can give the Manager options, and then redeem them from your income social contributions are not paid. Other options — pay insurance, vacations, says the economist.
In addition, regardless of whether the rate decreases or remains the same, the Russian grey market labor, informal labor relations, and still continues to grow, says Safonov. He cites the example of the introduction of the unified social tax in 2001: for the time of administration of the tax the Federal tax service, until the transition to insurance payments in 2010, the grey labour market continued to increase, said the expert.
With the participation of Elizabeth Arkhangelsk
