PRESS: Russian government mulls raising VAT to 20% from 18%

MOSCOW, May 28 (PRIME) -- The Russian government lacks 8 trillion rubles to fulfill a presidential decree on the country’s development, and about 2 trillion rubles of this sum can be received by increasing value-added tax (VAT) to 20% from 18%, business daily Vedomosti reported on Monday, citing three federal government officials.

An earlier announced retirement age increase can yield 2 trillion rubles for the budget, OFZ government bond placement 3 trillion rubles and an oil tax reform 1 trillion rubles.

The officials said that some of the decisions can be revised.

Two of the officials said that returning to a 20% VAT after a period since 2004 of an 18% VAT is seen as a less sensitive measure than raising the personal income tax or introduction of the sales tax. Nevertheless, this measure withdraws resources from the economy, one of the officials said.

(61.6659 rubles – U.S. $1)

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