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Fiscal load on business in Russia is 50-60 prc

April 23, 2012, 22:09 UTC+3

The minister believes that bona fide taxpayers should not suffer

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MOSCOW, April 23 (Itar-Tass) —— A fiscal loan on business, together with administrative barriers, is as high as 50-60 percent, Minister of Economic Development Elvira Nabiullina said.

A net fiscal load – tax and customs payments – is 35.6 percent, Nabiullina said at an expanded meeting of the board of the Ministry of Economic Development on Monday, April 23.

She recalled that no final decisions on tax changes have been made, and this deters investments in the country.

She stressed that tax changes should not be radical and that basic taxes should remain stable for five years.

The minister believes that bona fide taxpayers should not suffer because of those who avoid taxes and that wealthy people should pay bigger taxes.

In her opinion, effective tax rates should be comparable to those in other countries with which Russia competes, especially those with which it shares the common economic space.

Prime Minister Vladimir Putin disagreed with Nabiullina.

“You said the overall economic load on the economy is 35.6 percent. But we know about discussions in the government where some experts think that the load will be much smaller if the load on the oil and gas sector is separated. How much will it be then?” Putin said.

“The oil and gas sector is a big part of our economy,” Nabiullina started to object.

“That’s correct, but we direct oil and gas revenue to the Reserve Fund and do not use it,” Putin cut her short.

The minister replied that there are sectors where the load is much bigger than in the oil and gas industry, and named machine-building as an example. “In some industries it is as high as 38 percent and even 50-dd percent in the textile industry,” she said. “If we separate the load related to unearned incomes, I am not sure it [the load] in the oil and fuel sector will be comparable to that in machine-building.”

Putin, however, cited experts as saying that “the overall load will be less than 30 percent if the part I said is removed”.

Speaking of tariffs, Nabiullina said they should grow by 15 percent a year for natural gas, 10 percent for electric power, and at a rate matching inflation for railway transportation.

She stressed the need that the tariffs should take into account infrastructure monopolies’ investment programmes and noted that about 3 trillion roubles had been invested in the power industry and oil and gas transportation, which is 28 percent of all investments in the country.


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