PRESS: Russian min offers to tie income tax rate to pension savings

MOSCOW, Mar 10 (PRIME) -- The Economic Development Ministry is discussing tying the rate of the personal income tax to the amount of contributions to voluntary pension savings in order to stimulate Russians to save for retirement, business daily Vedomosti reported on Friday, citing five government officials.

Those who do not want to make pension savings will pay a 15% income tax, those who will contribute 10% of their salary will pay 10%, and those who decide to save 4% will pay 13%, the sources said. One of them added that these are preliminary estimates.

One of the officials said that the current pension system fully financed by employers must be replaced with voluntary payments by citizens. One of the government sources also said that the downside of the proposal is that the income tax is paid not only from salary, which is why an elevated rate can be unfair.

Prime Minister Dmitry Medvedev earlier ordered a government plan of action until 2025 be prepared by March 15.

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