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Russia to use additional revenues from VAT increase for infrastructure and healthcare

The tax increase will accelerate inflation by 1-1.5% in 2019, First Deputy Prime Minister and Finance Minister Anton Siluanov said

MOSCOW, July 15. /TASS/. The Russian government plans to use additional revenues from increasing VAT from 18% to 20% for financing infrastructure, health care and education. According to the preliminary calculations by the Ministry of Finance, the additional revenues will reach about 600 bln rubles ($9.57 bln) a year, First Deputy Prime Minister and Finance Minister Anton Siluanov said on Sunday in an interview with Channel One.

"The money … we will use first of all for health care, education, infrastructure projects," Siluanov said.

According to the Ministry of Finance, increasing VAT will accelerate inflation by 1-1.5% in 2019, but taking into account the current inflation forecasts of 3%, final inflation will fit into the target indicators of the Central Bank - 4%, Siluanov said.

According to him, after the increase, goods will rise in price - except for those that will retain a 10% discount. "These include food products based on a larger range of those that are consumed by citizens with low incomes. Medical products, medicine, and so on, the rate was 10%, and it remain. The goods that are socially very important," Siluanov explained.

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