Russian top diplomat says Trump looks 'more determined to fight terrorism than Obama'Russian Politics & Diplomacy December 09, 14:42
McLaren’s report: Doping cover-up in Russia was unprecedentedSport December 09, 14:23
Nearly 11,000 people leave Aleppo’s areas controlled by militants over past 24 hoursWorld December 09, 14:09
Lavrov sees good chance of reaching deal with US on militants withdrawal from AleppoRussian Politics & Diplomacy December 09, 14:04
South Korean president transfers power to prime ministerWorld December 09, 13:56
Russian top diplomat praises OSCE contribution to settlement in UkraineRussian Politics & Diplomacy December 09, 13:44
Peskov says top-notch lawyers hammered out Rosneft’s privatization dealBusiness & Economy December 09, 13:37
Press review: McLaren’s second round of anti-doping crusade and trilateral gas talksPress Review December 09, 13:00
Pole vault star Isinbayeva withdraws her candidacy for post of Russian athletics chiefSport December 09, 12:55
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.