UPDATE: Russian min denies discussion of new tax on people’s salaries

(Rewrites headline, lede; adds new data in third paragraph)

MOSCOW, Feb 1 (PRIME) -- Economic Development Minister Alexei Ulyukayev on Monday has denied reports that the Russian government is discussing raising the contributions of working people to the state Pension Fund and is proposing either introducing a new, 2% tax on salaries, or doubling the payroll tax for the highest-paid citizens.

Earlier on Monday, business daily Vedomosti reported on the discussion of the issue, citing two federal government officials.

“This topic is not being discussed in the government, I know that there are ideas of this kind but there is no discussion in the government,” Ulyukayev said.

The payroll tax in Russia is now paid by employers, based on the wage pool amount. The basic rate is 22% and the additional one on salaries above 796,000 rubles a year is 10%.

The total amount of wages forecasted by the Pension Fund for 2016 is 19.9 trillion rubles; a new 2% charge can add 400 billion rubles to the Pension Fund. A double tax rate on higher salaries will raise only 250 billion rubles for the fund, Vedomosti reported.

Government officials earlier agreed to raise the property tax; and in 2014, they were discussing raising the personal income tax by 2 percentage points to 15%.

The government will not increase the fiscal burden on the income of working people in the current conditions, Vedomosti reported, citing Director of the Institute of Social Analysis and Forecasting Tatyana Maleva. “Nothing can be introduced while salaries fall 10% a year,” she said, as quoted by the daily.

(75.1723 rubles – U.S. $1)

End