UPDATE: Medvedev: Russian govt to raise VAT to 20% from 18%

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MOSCOW, Jun 14 (PRIME) -- The Russian government has decided to raise value-added tax (VAT) to 20% from 18% currently, Prime Minister Dmitry Medvedev said at a government meeting on Thursday.

“We’ve made the following decisions that are proposed for consideration. The first one – the VAT rate will be changed. At present, the basic rate of VAT is 18%. We propose to raise it to 20%,” he said.

Incentives on VAT on main services and socially important goods will remain, Medvedev said.

“In order the burden does not fall on people, all incentives on VAT, on main socially important goods, main services will be kept. These are reduced rates on food products, children goods, pharmaceutical goods and zero rates on domestic interregional air transportation,” he said.

First Deputy Prime Minister, Finance Minister Anton Siluanov said that additional budget revenues from the increased VAT rate will amount to over 600 billion rubles annually starting from 2019.

(63.1164 rubles – U.S. $1)

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