Russian businesses ask for compensation for VAT increase

MOSCOW, Jun 21 (PRIME) -- Small and medium business association Opora Rossii has proposed to introduce compensatory measures for an increase of value-added tax (VAT) to 20% from 18%, the organization’s head Alexander Kalinin said in a letter to the State Duma’s Speaker Vyacheslav Volodin seen by PRIME on Thursday.

The VAT increase bill will lead to an additional fiscal burden on business in the amount of 600 billion rubles, as well as to growth of prices and reduction of consumer demand, Kalinin said in the letter.

Opora Rossii believes the government should consider providing additional compensatory measures to businesses connected with a reduction of a fiscal burden, including an abolishment of property tax, a reduction of insurance fees, and improvement of tax administration, including introduction of accelerated VAT return.

The government believes the VAT increase will raise the federal budget revenue by 620 billion rubles annually starting from 2019.

(63.6175 rubles – U.S. $1)

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