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Friday, October 21, 2016

The Ministry of Finance proposed to raise the VAT and deductions from wages

The Finance Ministry is proposing from 2017 to reform the insurance premiums start to collect them from all the payroll at a flat rate of 29%. In an alternative scenario would be an increase in value added tax.

photo: Natalia Muslinkina

These proposals were discussed in mid-September, Prime Minister Dmitry Medvedev and Finance Minister Anton Siluanov President Vladimir Putin, writes the newspaper “Vedomosti” referring to Federal officials.

In addition, ideas to reform the system of deductions from the wages were worked out on Monday at a meeting with first Deputy Prime Minister Igor Shuvalov, but the decision is still pending, tell officials said.

Reform insurance premiums, proposed by the Ministry of Finance, provides that a single rate will take effect from 2017, and by 2019 it will account for 26 percent (29 percent in 2017, 28 percent in 2018), the newspaper writes.

In addition, according to officials, the Ministry has developed an alternative option in 2017 to raise VAT to 20%, 10% preferential rate raised to 12% and from 2019 to start to increase the rate by 2 percentage points per year until it is equal to non-concessional 20%.

This measure, according to one of interlocutors of “Vedomosti”, in 2017, will bring in an additional budget of almost 600 billion, 400 billion will be available in 2018 and 200 billion in 2019.

But to hold such a “maneuver” in 2017 is unlikely to succeed, says official financial and economic unit: it is necessary to consider not only budget, but also the socio-political situation. According to Federal officials, the Ministry of Finance are traded for additional income”: need half — ask more likely to get exactly half

Currently, employers pay into the Pension Fund 22% of the salaries not exceeding 796 thousand rubles a year and 10% in excess of this amount. Contribution to the social insurance Fund is 2.9% of earnings up to 670 rubles per year, medical insurance Fund — 5,1% on all wages.


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