russian tax plan could put pressure
Last Updated : GMT 06:49:16
Arab Today, arab today
Arab Today, arab today
Last Updated : GMT 06:49:16
Arab Today, arab today

Head Tatiana Golikova

Russian tax plan could put pressure

Arab Today, arab today

Arab Today, arab today Russian tax plan could put pressure

Russian Prime Minister Dmitry Medvedev
Moscow - Arab Today

A Russian Finance Ministry proposal to overhaul the tax system could create a budget shortfall and put upward pressure on inflation, Tatiana Golikova, the head of Russia’s Audit Chamber, told Reuters in an interview.
The ministry has proposed cutting employers’ mandatory social security contributions with the aim of enticing businesses out of the shadow economy. To offset that, it proposes increasing value-added tax (VAT) to 22 percent from 18 percent.
The ministry wants the combined change to take effect from 2019. But the intervention from Golikova, an influential former government minister and deputy finance minister, indicates the proposal could face resistance from some quarters in ruling circles.
Golikova, whose audit chamber is responsible for monitoring whether the government is using budget spending effectively, said the changes would force the government to increase its support for the pension fund.
The Finance Ministry’s proposal is to cut employers’ social security contributions to 22 percent of a worker’s salary from their current level of 30 percent. A part of the contributions goes into the state pension fund to help keep it topped up.
The fund is already in deficit, a problem the Finance Ministry itself says needs to be addressed, and the drop in social security contributions will mean that less money is going into the fund, she said.
Asked if the proposed tax changes would increase the burden on the budget, Golikova said: “In this conception, in this construction, yes.”
The Russian budget had to provide around 3.4 trillion roubles ($17.40 billion) to cover the Pension Fund’s liabilities last year, an extra burden on a budget already straining under low tax revenues.
According to the Chamber’s calculations, under the finance ministry’s proposal social security payments would go down by 1.5 trillion roubles while revenues from VAT would increase by only 1.3 trillion roubles.
In the interview, Golikova said the other consequence of the proposed tax changes would be on inflation, which the central bank is seeking to get under its target of 4 percent by the end of 2017.
The Finance Ministry has acknowledged that the VAT increase may result in a one-off 2-percentage-point increase in inflation. Golikova said that would have far-reaching consequences for monetary policy and for ordinary people.
“This (proposal) means that a half or even more of that 4 percent (of inflation)... would be made by our own hands... This means that the central bank will have to make additional efforts to maintain the inflation level,” Golikova said.
“This is a significant factor affecting social policy.”
Prices rose 4.6 percent in the year to February. Upward pressure on inflation could force the central bank to keep interest rates higher for longer than it would otherwise have done, constraining an economic recovery.
Golikova said the Audit Chamber had yet to calculate how the proposal would affect economic growth. The Russian economy shrank 0.2 percent in 2016 and the economy ministry expects it to grow by 2 percent this year.

Source: Arab News

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

russian tax plan could put pressure russian tax plan could put pressure

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

russian tax plan could put pressure russian tax plan could put pressure

 



GMT 21:16 2016 Monday ,27 June

Zaki Badr discusses cleaning problem in Giza

GMT 21:46 2017 Saturday ,14 January

Turkey arrests 60 businessmen for alleged Gulen ties

GMT 22:38 2017 Friday ,24 March

Abbas meets with Merkel in Berlin

GMT 09:02 2017 Monday ,27 March

Tunisian Premier Concludes Visit to Sudan

GMT 15:54 2017 Friday ,01 September

Attorney General Directs Prosecutors to inspect Prison

GMT 09:22 2017 Sunday ,31 December

HM King condoles with Afghanistan President

GMT 10:12 2016 Wednesday ,06 April

Strong dollar, mild weather shrink H&M profits

GMT 17:03 2016 Saturday ,24 December

7 police killed in attacks in Afghansitan

GMT 13:51 2017 Friday ,17 March

Israel denies Syria shot down a warplane

GMT 04:08 2017 Thursday ,05 January

Carbon tax can fund clean energy transition

GMT 19:27 2016 Wednesday ,14 September

Alstom to go ahead with plans to shut down Belfort plant

GMT 01:44 2017 Friday ,15 December

Mennat-Allah underlines importance of landscapes

GMT 04:57 2017 Thursday ,14 December

Trump tells NASA to send Americans to Moon

GMT 21:43 2017 Wednesday ,11 October

Qabil discusses with Swiss delegation improving power

GMT 21:06 2017 Sunday ,17 September

OIC condemns suicide attack in Kabul

GMT 08:27 2017 Thursday ,27 April

Nokia reports another loss as networks sag

GMT 19:41 2017 Monday ,06 February

Elina Svitolina Claims Taiwan Open Title

GMT 09:39 2017 Friday ,03 February

Former Brazilian president Lula's wife dies of stroke
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday