President Vladimir Putin in his address to Russians proposed that from 1 January 2021 to raise the tax to incomes of physical persons from 13% to 15% per year for those earning more than 5 million rubles per year. The charging of additional tax on the portion of income exceeding 5 million, will allow the budget to 60 billion rubles. Putin said that the money will be used for the treatment of children with serious illnesses. We asked experts to comment on the novelty.
Igor Nikolaev, doctor of economic Sciences
“This proposal was not a surprise. A week ago there was a leak picked up by the media, that the summit seriously discussed the introduction of a progressive scale of taxation.
Then called the figure of income which fall under more high percent – 3 million rubles per year. It was obvious to me that a progressive scale will enter, but of course I didn’t think it would happen so soon. Apparently, the government used the conditions of the moment.
against the background of a pandemic, the need to Finance everything associated with health care, especially the treatment of sick children, no doubt.
In a poor country receiving more than 5 million roubles are considered to be very rich, and the idea of charging more taxes is popular. Although hypothetically 60 billion rubles in Russia – the money is not very large.
I Think that the progressive scale is economic sense. That’s just we have always had a problem with the performance, especially when there is opportunistic as it is now.
you Need to understand that now the progressive tax scale will be reflected in the law. There are fears that it will give a reason to play with the rate in the future.
When you need money, the government, feeling the taste of easy money, may again raise or extend the effects of higher rates for less wealthy citizens – not receiving 5 million and 3 million, or 1 million a year. This development will directly threaten the already small middle class of our country. And he is now with that fear to live.”
Nikita Maslennikov, the adviser of Institute of modern development
“From a social point of view, the decision to raise the personal income tax rate for the rich seems fair: there is a purpose for these funds. The main thing that went from idea to impose a gains tax on the income of 2-3 million roubles a year. In this category would fall the entire middle class.
But once the tax on income of individuals, which for many years was one and immutable – 13% – was touched, it immediately raises a lot of questions. Release it the poorest citizens from personal income tax? Then we have to compensate a substantial part of the budgets of the regions.
do Not have employers ‘ incentive to switch to salaries in envelopes and bring an official salary of highly paid employees to the level of Deputy��in the state Duma – 4 800 000 rubles a year? Everything about the tax system, it requires a very clear settings”.
Alexander Safonov, Professor of the Financial University under the government of the Russian Federation:
“In all economically developed countries there is a progressive scale of taxation. Russia, if she wants to have a normal economy, should move in this direction. Especially due to the fact that we have too high a level of income inequality. The bulk of the population, they are very modest, and in this case rate of 13% is quite reasonable.
At the same time, there is a group of people with high incomes, it is possible to impose a rate even higher than suggested by the President – 20-25%. However, a large economic effect it may not give, since it will be affected too small a proportion of citizens from the total number: the rich have only a few percent of the total population. While administrative costs will increase. And it is also necessary to consider introducing a differentiated tax.”
Alexei Vedev, head of the Center for structural research of the Ranepa:
“I treat this as a negative. First, in 2018, the government has officially announced that until 2024 the taxes we have will not increase. Second, citizens who earn annually more than 5 million rubles, the tax will be collected at the end of the year. That is, with the big delay and probably not always correctly.
it is also Not clear how this situation will affect self-employed and individual entrepreneurs. I foresee that many of them will have to litigate with the tax authorities on the question, what is considered net income. There are some nuances and complexity. I think the state of the business climate and stability in the tax area is more important than the hypothetical benefits that can be obtained, raising for some the rate of 2%”.
