PRESS: Russian ministry offers single rate for payroll contributions

MOSCOW, Sep 20 (PRIME) -- Russia’s Finance Ministry has suggested collecting insurance contributions from the whole payroll fund at a single rate of 29% from 2017 and cutting the rate to 26% by 2019, Vedomosti business daily reported Tuesday citing several federal officials.

The ministry also offered an alternative: to increase the value-added tax (VAT) to 20% from 18% in 2017 and its preferential rate to 12% from 10%, and to increase the preferential rate by 2 percentage points per year from 2019 until it equals 20%. One of the federal officials told the daily the measures may add 600 billion rubles to the budget already in 2017, 400 billion rubles in 2018 and 200 billion rubles in 2019.

An official from the financial and economic bloc of the government said it is very unlikely that the measures will be implemented from 2017 as one should take into account not only the budget component of the changes, but also the social and political situation.

The ministry’s idea was discussed at a meeting of Prime Minister Dmitry Medvedev and Finance Minister Anton Siluanov with President Vladimir Putin earlier in September, two officials told Vedomosti. Putin’s spokesman Dmitry Peskov confirmed that the meeting was held but refused to disclose details.

(64.9173 rubles – U.S. $1)

End