Twelve militants of Islamic Jihad Mujahideen Jamaat grouping detained in KaliningradSociety & Culture April 27, 2:14
Russian Prosecutor General’s Office finds another 3 NGOs to be undesirableRussian Politics & Diplomacy April 26, 21:42
Moscow ‘seriously concerned’ about Turkish airstrikes in Iraq, SyriaRussian Politics & Diplomacy April 26, 20:55
North Korea ‘neither fears war nor wants to avoid it,’ says country’s UN missionWorld April 26, 20:37
Russia’s Emergencies Ministry to continue helping Serbia in mine clearance in 2017Military & Defense April 26, 20:20
Putin says Russia, China maintain relations at 'unprecedentedly high level'Russian Politics & Diplomacy April 26, 20:02
Polls shows number of happy Russians at record-breaking historic highSociety & Culture April 26, 19:27
IS recruiting Taliban fighters in Afghanistan — Russia’s General StaffMilitary & Defense April 26, 18:49
Coffin with presumed remains of 19th century Russian general dug up in TurkeySociety & Culture April 26, 18:26
This is the maximal possible immediate jump, according to Sberbank expert estimates.
The tax would also cause a maximal 1% retail sales reduction, which should drop gross domestic product 0.5 p. p.
“A new turnover tax will cause the highest costs for the county’s economic development because of limited consumer demand and sharper price jump than in other scenarios,” Sberbank experts warn.
Sales tax was also high undesirable for some legal reasons, the experts added. In particular, the Constitutional Court ruled simultaneous levying of VAT and sales tax unconstitutional.
Another government initiative, increasing VAT rate from 18 to 20% “will inevitably lay additional tax burden on the final customer” and lead to a one-off price jump by a maximum of 1.7% A milder price increase is possible if the tax is partly paid from manufacturers’ or sellers’ margin, which is “highly probable amid the falling consumer demand”.
Price growth will negatively affect retail sales that are estimated to contract by a maximum of 0.8%, which is equivalent to a GDP decline by 0.3-0.4 p.p., Sberbank experts.
The government plans to settle the sales tax issue were voiced in early July by Finance Minister Anton Siluanov in an interview to Rossiay-24 TV channel.
“Sales tax is one of the options under consideration aimed to expand income basis of the regional budgets,” the Minister said. “This is a regional tax.” A total of 200 billion roubles ($7,140) that can be thus collected at a 3% rate was an important amount for the regions but the discussion was yet to be completed, he added.
Sales tax is an indirect tax included in the price.