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The Russians will face a tax trap: 13% of income tax will seem heaven


PIT — personal income tax, that is now 13%, is going to be risen to 15% by the government. Mass media was informed by the sources in White House. We spoke with the experts about a real possibility of such perspective.

Not too comforting budget forecast for the next 3 years was made by Ministry of Finance. With planned income the hole in the budget might get 60% bigger than target gap.

During the process of searching for new ways to fill the missing trillions the experts have come back to old ideas, specifically increasing taxes. This time the variant of increasing PIT to 15% is under discussion.

According to the source, Ministry of Finance is considering this measure along with the decreasing of insurance contribution, which is paid by the employers (now it's 30%, it's planned to be decreased to 21%). Ministry of Economic Development agrees with the increasing of PIT to 15%, however, in the Ministry they are talking about cocurrent introduction of «the concept» of minimal income, which won't be a subject of taxation at all.

Our newspaper consulted with the specialists about the perspective of this plan.

Mikhail Belyaev, the Head of the banking section of the nationwide consumer organization Finpotrebsoyuz:

«Ministry of Finance has been thinking about this plan for a long time, which is merely a proof, that this administration is practicing not a state approach of balancing the budget, but an accounting one.

From my point of view, this is just an additional piling of events, which will never be completely fair; this is a chimerical scheme, which will not work in our conditions.

People are very sensitive to the changes in taxation. Remember, when the authorities refused to indexate pensions of working pensioners, more than 5 million of them left the formal employment. Let's hope, this initiative of MinFin is just food for thoughts».

Vyacheslav Shynkarev, expert of «SKB Contur»:

«In fact, it's difficult to estimate some intentions of the officials, which don't have any form of legislation yet. Finally, everything will depend on the fact whether this initiative will be presented in the law.

Itself PIT rate increasing from 13 to 15%, especially if it happens along with the supposed decreasing of insurance contributions, is not something extraordinary, it’s rather positive occurrence for business.

However, there are different ins and outs, which with the practical realization of such changes can significantly make the situation more difficult. For instance, tax progressivity is being discussed (implementing some tax deductible item).

In reality it can turn into difficulties with correct calculation of PIT for the organizations, which have separate divisions, where one employee could work in several of them during the same month. In such situation PIT has to be calculated separately for the division. How to apply „deductible“ sum is not clear at all.

Sure enough, it would be good, if apart from increasing tax rate initiators of changes had a though on simplifying the rules of calculating, keeping and transferring PIT to the budget by the tax agents, following the example of insurance contributions.

It’s no secret, that 2016 was very tough for companies’ accountants because of PIT (relatively new form of reporting by the form 6-PIT). Even now meeting all requirements of Tax Code on PIT is quite problematic».

Practically, if PIT increases, ordinary citizens will suffer first. You can count how their income will drop. Whatever the nuances of the government plans to increase the tax burden on the Russians can be, no doubt, the general pattern won’t change.

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