PRESS: Russian officials mull sales tax as alternative to VAT hike

MOSCOW, Mar 21 (PRIME) -- Russian authorities are considering introducing the sales tax to to avoid raising value-added-tax (VAT) as proposed by the Finance Ministry, business daily Vedomosti reported on Tuesday, citing federal government officials.

Earlier in March, the Finance Ministry offered to introduce a 22% rate for the payroll tax and VAT, now at 30% and 18%, respectively, to make formal employment more competitive, while not raising the budget burden.

One of the sources said that the sales tax could amount to 2–3% and could encompass a non-tax payment, in this case there will be no need to indicate it in checks and to raise consumer prices.

The source said that whereas a VAT increase will hit the entire industry, the sales tax will influence only retailers.

Another federal government official said that there is an idea to charge the sales tax to municipal budgets.

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