Tax rebus-2018: the Russians get any nasty surprises

New political cycle, but rather, another six-year after the presidential election is not only a reshuffle of power, which of course will happen, at least at a constant first person. Even this, as we have long said, presenting public discussion of economists, the new development strategy of the country. The discussion, however, discussion remained. About its results will tell if and, then just after March 18, and it’s likely not right. In addition, the veterans among economists, strategists honestly admit that all the earlier documents that laid claim to the role of strategies were never executed. Then what will change? Most likely the taxes before the election, trying not to raise, in order not to anger the electorate. And it will affect not bureaucrats playing “king of the mountain”, not “Champions of the state order” from the list of Forbes, and ordinary citizens.

photo: Gennady Cherkasov

Conditions fiscal objectives

Taxes definitely affect everyone. They, of course, nobody likes — even those who fervently collects them with the other, he probably pays them not with a blissful smile on her face. But everyone understands that it is inevitable. Another question, what should be the taxes?

Not by chance the taxes are entered, canceled or modified laws. Historically, this limitation of the appetites of power — once kings and then to governments. And this is the recognition that specific taxes should be the result of consensus in society: the laws take the elected representatives of this society. Then, however, it comes in the features of the constitutional order, politics and political strategies. In Russia, the frequent changes of governments in the 90-ies of the last century, conducted tax policy has never led to the stated results. What can only regret.

The task of taxes to fill the budget. But to fill. In all textbooks in Economics says that taxes should perform the role. That is, they should encourage and not to suppress economic growth, contributing to the improvement of its structure. But textbooks are written for students, not for politicians and officials. The last example is not from a textbook. In Russia here-here will run for years wareprise in the political kitchen of the tax maneuver in the oil industry. As a result, this maneuver completely missing a seemingly mandatory element as the stimulation of oil refining, that is, the waste of domestic Energy from purely raw material specialization.

Now try to look in the nearest future Russian taxes. First an introduction: we have long warned that before the presidential election, the tax burden will not grow. With certain reservations (to increase excise taxes, which are the same taxes, although technically they are not, fines and other “non-tax” payments), the promise kept. But the setting, taking into account historical experience, read this: just before the election, taxes will not rise, then after them will start… So when in may 2016 appeared leaks on the preparation of personal income tax in the form of a waiver of the flat rate, then a special surprise is not caused. However, the government at all levels acted with a refutation. Of course changes can happen but this year the flat rate remains steady.

Then how can you expect trick? After the election — so the scope for tax increases is opened after 2018. At the Gaidar forum in January of 2018, Finance Minister Anton Siluanov, on the one hand, assured that taxes this year will not grow. On the other hand, he also said: “the Government does not increase the tax burden for the coming years”. To remember is both. As well as the fact that a couple of years ago, when the presidential election was still far away, Siluanov warned that tax increase is possible after 2018. And most importantly, the recognition of the Minister of Finance: at the end of the 2017 fiscal burden on the economy as a whole amounted to 30.8% of GDP, which is excessive and therefore reduces the competitiveness of Russian. This assessment remains that when whatever happens with the taxes on.

As the second keynote will select the optimistic scenario, the tax burden will not increase “in the coming years.” But it is in General. In particular, we expect a large tax maneuver. It is appropriate to recall that the President talked about the individual elements of tax burden: “30% one insurance premiums! I’m not talking about the VAT, about income tax. In other countries there is no such load.”

Well said! Soulful, like literally just found out about how much “weigh” taxes. Now let’s remember: last year the Ministry of Finance and Ministry of economic development agreed on tax reform. This reduction in premiums from 30% to 22% when the compensating increase in VAT from 18% to 22%. As assured in the Ministry of Finance, the total burden on business will not increase. But not reduced. Then what is the maneuver? Meaning — the struggle with salaries “in envelopes” and, consequently, increase the collection of income tax. He will join the regional budgets, the Federal will take “his” due to the increase in VAT.

Two sides of the same maneuver

As you wish, but the strange maneuver. First, if the tax burden does not change, it remains in force, the Minister of Finance today it is excessive competitiveness. Secondly, when it is beneficial, the Ministry of Finance is in position a purist: excise taxes — no taxes and that sort of pedantry. And here the rise in the VAT rate, one of the pillars of the Federal budget, balances reduction of payments to Pension and social funds, which — attention! — by law, are considered extra-budgetary.

Of course, Anton Siluanov may be unhappy that the fees to social funds in order to save and better administration to collect tax. But at the same time, tax reform reveals the open secret — that the Federal budget is anchorage all “off-budget” social funds.

But the topic of “compensation” can continue to be rotated differently. After all, in the end, important is not the collection of taxes in itself and not their “fellowship”. The point is, what are the budget. That is the main theme — not a tax which compensates for the collection, and what new expenses “kompensiruet” new tax revenues.

Assistant to the President Andrey Belousov, is believed to support the idea of increasing investment in human capital (education, health, science) and in infrastructure projects. This is the essence of the new economic strategy, according to Alexey Kudrin and CSR. But for the expansion of expenditure on these noble goals we need new revenues. Where did they come from?

The answer is the first: reducing other costs. But here space is limited. This year’s military spending has been reduced (which is the largest block of expenses, along with social), and new large-scale reductions are unlikely.

Response two: from new sources. CSR to offer a broader privatization. In Russia, according to the calculations of the CSR, the state sector share in GDP (including shares in companies with state participation, Unitary enterprises and the sector of public administration) from 2006 to 2016 rose from 39,6% to 46%. The cost of state-owned companies in Russia in 2015, $175 billion Seems to have something to privatize. But the sanctions limit the participation of foreign capital in privatization, but without them, the effect may not live up to expectations.

There is a new source of revenue, as the output of the shadow economy. But he is partially fit. The decrease in the tax maneuver of social security payments may cause an increase in income tax revenues, but the rise in the VAT rate could make the shadows a number of companies.

Finally, tax revenues. Tax reform promises the increase in fees income tax and VAT. And this increase the capacity of Federal and regional budgets.

In January of 2018, Finance Minister Anton Siluanov said that taxes
this year will not grow.

Grace period

Stay optimistic. There is reason to believe that the beginning of a turn in favor of increasing spending on human capital development and major infrastructure projects real. Channels revenues budget revenues for this named. If this is the core of the future economic strategy, from the point of view of taxes near the main innovation — the maneuver with a reduction in social contributions and VAT rise.

What in the periphery? Refer to the tax innovations which concern ordinary citizens. We are constantly told that the Tax code too many privileges, but as long as there are new — such is the specificity of the pre-election period. For example, in December 2017 Vladimir Putin on a press-conferences promised to release from payment of the land tax for plots of all old-age pensioners. This is the law — PP. 8 paragraph 5 of article 391 of the Tax code of the Russian Federation. Moreover, the new exemption applies retroactively — 2017. The pensioner, the owner of the land plot of 6 acres, is fully exempt from tax. If the portion is bigger then his size subtract 6 acres, and the remaining charge tax. Same thing in the case of land a few.

At the same press conference was the promised cancellation of tax debts of citizens. The promise has already been done in article 12 of the Federal law from 28.12.2017 g. №436-FZ “On amending parts 1 and 2 of the Tax code of the Russian Federation…”. According to the calculations of lawmakers, this tax Amnesty (not to be confused with the Amnesty for returning to Russia capital) will affect 42 million Russians. Will be charged on arrears (word, awakening associations with serfdom) as of January 1, 2015 together with accrued penalties and fines. Everything should be done automatically.

Still preparing the bill according to which in fair housing can receive a tax deduction. The amount with which it is possible to obtain (13% expended), are defined in 2 million rubles a year, but receiving a tax deduction, the employment contract must be concluded for a period of more than one year and registered in Rosreestra.

And finally, more recently, the government approved the exemption from personal income tax monthly payments in connection with the birth or adoption of the first and second child.

Not that life has become better and more fun economy to relax but not presidential elections (and, of course, oil prices) is to say thank you for the fact that the tax burden while sent on prevention.


Anna Kokoreva, Director of the analytical Department of Alpari:

“At the moment the State Duma is considering a bill to impose a progressive scale of tax on personal income. the idea is to rate of 13% is acted for people who get less than 24 million rubles per year. For those who earns more than the specified amount, the rate will be 18%. With high probability the bill will be approved and supported by the population, as in fact affects only the rich strata of the population. The ordinary citizen innovation will not concern, but those who have substantial income, they will have to pay the Treasury more. This will benefit the Russian budget, as tax revenues increase. Other radical changes in the tax laws after the presidential election, I did not expect.”

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