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Russian cabinet pledges to improve public services through VAT hike

Those funds will be invested primarily in those social sectors, Russia’s First Deputy Prime Minister and Finance Minister Anton Siluanov said

MOSCOW, June 16. /TASS/. Additional funds raised through increasing the VAT (value-added tax) rate will be spent on social needs and improvement of public services, Russia’s First Deputy Prime Minister and Finance Minister Anton Siluanov said Saturday.

"Those funds will be invested primarily in those social sectors, and we are set to evidence a new quality of public services in those sectors in a six-year period," he said, adding that "a particular emphasis will be made on healthcare."

On Thursday, June 14, the government set forth a proposal to raise the value-added tax to 20% from 18% starting 2019. The raised funds are planned to be allocated for the development of infrastructure and new sectors of the economy. The VAT rate increase is expected to bring 620 bln rubles ($9.