In Russia launched a discussion on the most painful for the authorities and society the topic of reforming the tax system after 2018. While vector a defines the Ministry of Finance, the proposals which boil down to a redistribution of the tax burden from business to citizens themselves. And, about the “luxury tax” it continues: growth of budget revenues is planned to provide primarily at the expense of the middle class.
photo: Gennady Cherkasov
About the need to reform the tax system, Vladimir Putin said in his message to the Federal Assembly. According to him, the 2017-th year should be devoted to discussion of various proposals in 2018, when a moratorium, to make the relevant regulations to the state Duma, to 2019-the year the country began to live according to the new more equitable and efficient Tax Code.
The order of the President did not pigeonhole: a public discussion on “setting up” of the tax system with the participation of Ministers, deputies and experts started already in the first week after the holidays in the framework of the Gaidar forum. But as the discussion took place on Saturday, and even after the Old New year — it got publicity.
Most of the professional media drew attention to the dispute between the Ministry of economic development and Ministry of Finance about the transition to a new order of taxation in the oil industry. And calls the head of the Finance Ministry Anton Siluanov to deprive the oil companies — primarily state — individual benefits. Meanwhile, almost unnoticed remained the discussion of the General principles of tax policy after 2018. Although concrete proposals from the major trendsetters of the Ministry of Finance and Ministry of economy has not been announced, government officials have made clear that discussing, and that will remain in the status of “sacred cows” and under no circumstances will not change.
In vain present at the forum heads of business associations urged officials to reduce the tax burden on businessmen, threatening that otherwise economic growth is not achieved by 2019-20 biennium required the President 4%. Their opponents from the financial-economic bloc stood firm.
The amount of tax revenues, according to them, is not subject to reduction because otherwise the state will not be able to meet its expenditure obligations. “Tell me, what are the costs we must reject the reduction of the tax burden? Now what are we going to pay salaries, pensions, than to Finance social spending?” – lashed out at the head of RSPP Alexander Shokhin Anton Siluanov.
The Ministry of Finance agrees that the developing economies is less load than in Russia (for example, Kazakhstan has 25% of GDP, and in India — 20%), but before making conclusions, it is necessary to see how the social system works and what are the costs of the defense. “For a strong army, too, need to pay,” – said the head of the Ministry of Finance.
Budget expenditures have been created and approved until 2019. In the future, with the growth of the elderly population, increased geopolitical tensions and other reasons, they are unlikely to be adjusted downwards. So, tax revenues must grow. Other way, according to the Finance Ministry simply does not exist.
What, then, are ready to discuss with the representatives of the financial-economic bloc? First of all, the redistribution of the tax burden from direct taxes to indirect. Now work in Russia have to pay this tax at unprecedented rates: employers pay 22% to the pension insurance Fund, 2.9% social insurance Fund and 5.1% to the medical insurance Fund.
According to estimates PwC’s total tax rate for Russian companies of medium size is 47.4% of the profits, of which taxes on labour to 36.1%. “It is clear that many people simply do not pay, – said the head of the Ministry Maxim Oreshkin, adding that the premiums yourself guaranteed paid by the state (for state employees), big business and the middle part of the business. The rest of the economic actors to the extent possible, remain in the shadows.
The Finance Ministry has agreed to discuss reducing the tax burden on the payroll while increasing VAT. We will remind that since 2004 the VAT rate in Russia is 18%, sales of some goods (food, books, medicines, goods for children) is taxed at a concessional rate of 10%.
In the framework of the reform of the tax system, proposed to increase VAT to 20%, with a gradual unification benefits, according to officials, can be replaced by targeted support for the poorest citizens, paying them a monthly allowance of 1.5 thousand rubles.
The benefit of such innovation is to state the obvious. If employers learned to avoid the payment of insurance premiums, then the famine will not escape anybody. People will still go to the shops, providing an uninterrupted supply of high VAT to the Treasury. By 2019, the share of this source in total tax revenues of the budget should grow to 40%.
Cons, of course, too — they are primarily associated with possible acceleration of inflation and the growth of social discontent: raising VAT, the Finance Ministry will shift the burden from business to the population, especially on its solvency part. It is unlikely someone will like it.
In addition, during the discussion, Anton Siluanov mentioned that part of insurance premiums, which in Russia companies pay in other countries pay for their citizens. This observation was consonant with the statement of one of the developers of the new development strategy of the country till 2030 by HSE rector Yaroslav Kuzminov, who spoke out for the inevitable increase in the burden on the population.
Apparently, the citizens will have to take some social security payments — at least in the health sector. In this regard, officials are already discussing the introduction of a social gathering with unemployed or employed in the grey sector of the economy of the Russians, which according to Rosstat is more than 16 million people. Now deductions to the social Fund for them made by the regions, with the abandonment of the practice, the payment amount may be not less than 20 thousand rubles per year.
The theme of personal income tax after the angry shout of Dmitry Medvedev at the Gaidar forum was not discussed publicly. But unofficially, officials admit that in preparation for the reform debate on the taxation of individuals is inevitable, and it can be conducted in different planes.
There is, for example, the initiative of the social block of the government to exempt from income tax those whose salary does not exceed the minimum wage, or 7.5 thousand rubles (there are now 4.9 million Russians), It can be balanced by a transition to a progressive scale for the incomes of other workers.
The authors of the strategy-2030 offer to make taxation more favourable than in the European countries by setting a maximum interest rate of 20% (in the EU it reaches 50%- “MK”) for 5% of employees receiving 150-200 thousand rubles per month.
“Vladimir Putin, by the way, did not rule out the question of the transition to a progressive scale of tax on income of physical persons and discussions on the subject, reminds one of the participants of the Gaidar forum, He just said that now such a transition is not feasible. However, no one knows what to think the President in 2018, when the presidential election will end”.
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