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Sunday, March 18, 2018

To collect sales tax on “social parasites” would be extremely difficult

The government is discussing a new idea about how to solve the problem of millions of freeloaders – those who do not pay taxes, but wants to receive from the state pension and free medicine. Perhaps we will focus on the introduction of a special tax for social parasites, as is already done in Belarus. However, whether effective such a measure?

Unemployed citizens will have to pay for the use of social infrastructure. This bill is currently being drafted, said Deputy Prime Minister Olga Golodets during pravchasa in the Federation Council.

“From 30 million to just over 8 million people are completely excluded from the economy. In fact they work, but never formalized and pay no taxes”

According to her, the Russian legislation allows Russians not to work, but they do not pay insurance contributions, including in system of obligatory medical insurance.

“Another part of the population we don’t have to pay fees from the payroll. These people we see, and that’s 68 million people. We have a total in the working age group of 75 million people. All the rest we see: we see their payroll and see where they live, see their age and so on. But we have to state is usually that the person wishes to work and not work”, – said the Golodets. From her words it turns out that under the new tax gets 7 million Russians.

Type of payment not yet defined and is currently being discussed. It is expected that the tax will arrive in regional budgets.

“Today there is a draft law, which the initiative provides payment of a specific payment, the payment type under discussion in the budgets of the constituent entities of the Russian Federation of the working population that do not belong to the privileged categories, such as mothers caring for children under three years of age, conscripts and so on. That is, the project is there and he discussed” – quoted Golodets in her Secretariat.

As you know, wages are subject to 13% tax on income of individuals. But in addition, the employer is obliged to pay the amount of the salary by three types of contributions to the Pension Fund (22%), in social insurance Fund (2.9%) and in Funds of compulsory medical insurance (5,1%). Some companies, however, can pay dues at a reduced rate.

Tax for unemployed is expected to make the type of patent system that exists now for foreign citizens and will be created for the self-employed.

The problem of informal employment is acute for Russia. The evaluation of the Ranepa, Russia now in the shade has about 30 million people. This includes three categories of citizens – illegal entrepreneurs, self-employed and salaried workers who receive a salary in envelopes or have informal jobs.

“From 30 million to just over 8 million people are completely excluded from the formal economy. In fact they work, but never formalized and do not pay any taxes,” – says the newspaper VIEW Director of the centre for socio-political monitoring ION Ranepa Andrew Departing. This estimate almost coincides with the voiced Golodets numbers.

“About 4-5 million people of those 8 million are self – employed. The recent actions of the state aimed at formalizing the self-employed that, on the one hand, fair enough. On the other hand, there is another large group that falls under the terms of the new tax – hired workers”, – said the Departing.

Part of hired workers have an informal employment, however, they formalized the basic work, their employer, in part, makes contributions to the funds. “Another big part is the employees who salary is paid in envelope. Officially they are employed, but the payment to the funds is incomplete. They are also underpaid the state for the services of free medicine,” says the source.

On the one hand, the government through new tax corrects injustice: the ones that work and pay taxes, others are working, but contributions do not, and those, and others receive from the state free medical care and pension. However, there is a flip side to the coin. “For the most part people were forced to work in the shadow economy because they simply do not have the opportunity to work officially. Salary in an envelope – it is the decision of the employer. And people with low qualifications, the elderly or young people without profession, agree to such working conditions due to the lack of choice. It’s one thing if they were decent official work, if they had a choice – then Yes, the law would be logical and effective. But we have the initial conditions, not quite matching the adoption of such a law,” – said the Director of the Center for socio-political monitoring ION Ranepa.

It turns out that first you need to expose employers and not to shift the responsibility for wages in envelopes on the employee. But here arises another problem – the survival of the companies that have moved from the grey to the white area?

As for the self-employed (and entrepreneurs), in fact, they have no serious incentives in order to emerge from the shadows. First, the officially unemployed in any event receive a minimum pension, and its amount is often not too different from a regular person’s pension, with a salary of which were contributions to the Pension Fund.

A similar situation can happen with the payments of the MLA, if the government will refuse to issue medical insurance for non-working citizens who do not pay tax. Not every illegal working citizen wants to legalize in order to receive the policy of obligatory medical insurance, given the not always high quality of service in the state system of health care. If he earns enough, it will prefer to use paid medical services.

Perhaps for each category of people working in informal economy, needs its own mechanisms for legalization. “It is necessary to separate different categories of entrepreneurs, self-employed and salaried workers”, – said the Departing.

In addition, there is another category of citizens is freelancers that perform specific tasks under short-term contracts, with their wages paid exclusively to personal income tax at the rate of 13%. “They kind of fall into the category of those who must pay the tax on medical services. Or their employer will need over 13% to pay insurance premiums,” says the source.

The sum of the future tax is still under discussion. But it is logical to assume that the amount of tax should be lower than the cost of a patent for the self-employed. Otherwise self-employed (and their share of 50-60% among the 8 million unemployed), there is no point to buy the patent. The value of a patent for the self-employed can fluctuate from 6 to 20 thousand roubles depending on region. Thus, if the government will make 8 million unemployed Russians to pay once a year tax in the amount of 6-20 thousand rubles, regional budgets can receive 48-160 billion per year.

The expert is not sure that the state will collect the tax from all, but he is confident that this will create additional social tensions. “This tax will be very difficult to collect. I think that the Ministry of Finance is aware of this. How to do so, to increase the collection of tax is a matter of discussion,” – said the expert. The easiest option – you can refuse to issue insurance policies for those who do not pay insurance premiums. However, the expert considered that it would be some restrictive measures to combat shadow economy. There should always be a carrot and a stick.


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