Tax system in Russia to remain unchanged for next few years – PM

Cash, Calculator, Pen

MOSCOW. Dec 9 (Interfax) – The Russian government is not planning to raise taxes in the country in the next few years, Russian Prime Minister Dmitry Medvedev said.

“Currently a decision has been made, it was supported by the president, that we in the next few years will not touch the tax system in general and we will not touch the income tax at 13% in particular,” he said during an interview with leading Russian television channels.

Asked whether a progressive income tax scale might be introduced instead of the 13% flat rate, introduced in 2000, Medvedev said “gray” wages that were widespread in the 1990s had practically stopped being paid.

“All taxes are being paid. It’s better to pay than not to pay. Why kill the goose that lays the golden eggs?” he said.

A progressive scale would have its advantages, but introducing it would incur higher administrative costs, he said.

“We’d have to force everybody to file declarations. True, they can be e-declarations. But even if you have a low salary you would have to file a declaration for one job, then another. That would complicate everything considerably,” he said.

Medvedev said he did not think Russians had yet achieved the sort of legal awareness that makes paying taxes an “absolute imperative” and declining to pay them a serious crime.

In any case, wealthier Russians pay more than ordinary Russians when it comes down to tax on expensive real estate and expensive cars.

“Here, expensive real state and expensive cars are now taxed at an elevated rate, and whoever buys expensive real estate will still be sharing some of their income,” Medvedev said.

“I think this is the optimal approach for now, but what the situation is in five or seven years from now, we’ll have to wait and see,” he said.