The Ministry of Economic Development and the Ministry of Finance of Russia reached consensus that they need to decrease employment tax for relaunching the economic growth, and to reimburse the budget revenues with indirect taxes, RIA News reports, quoting Vedomosti and federal officials.
In January, Minister of Finance Anton Siluanov stated that the employment tax level in Russia is one of the highest taxes in the world, currently the insurance contributions to public non-budgetary funds amount to 30% from the payroll budget.
“The Ministry of Economic Development and the Ministry of Finance agreed to raise VAT and decrease insurance premiums. There is a consensus in the economic cabinet of the government: they need to decrease employment tax for relaunching the economic growth and to reimburse the budget revenues with indirect taxes”, the newspaper reports, quoting their sources.
“The options are different; the main option is to lower insurance premium to 21% and raise VAT by 21% (other options: 20/22, 22/22, 21/22), the officials report, there are no other decisions. The idea was studied by deputies and experts, including on CIS platform, two of them know, but the president will decide”, - the edition continues.
According to newspaper information, Minister of Economic Development Maxim Oreshkin became the initiator of amendments. Meanwhile, Siluanov supports the decision, the sources quote.
The newspaper source reported that on Monday, Oreshkin told the first Vice Prime Minister Igor Shuvalov about the relaunch of economic growth; tax maneuvers, export support, expansion of tax incentives for innovational companies were among possible measures; antipoverty measures, individual income tax proposals.
In September, the mass media reported that the Ministry of Finance proposes to collect insurance premiums from the total payroll fund at the single rate of 29% since 2017 and decrease it to 26% until 2019. The alternative option is to raise VAT to 20% in 2017, to raise 10% reduced rate to 12%, and to increase it by 2 points per year since 2019, until it is equal to 20%.
