Vice PM and finance minister Alexei Kudrin noted Friday at the conference “Taxation — Modern Look” that the growing tax burden on businesses is a long-term trend, but not a temporary measure.
“As foreign experts note, the whole world has entered a “sober decade”, he said adding that there are two ways of plugging the budget deficit: to cut spending, including social obligations, or raise taxes. “I believe that higher VAT rates to a lesser extent prevent businesses from expanding operations than, for example, an increase of the corporate profit tax, and it’s easier to hide profit. Excise duties on alcohol and tobacco already increased, but will be raised for another 20—30%. Certainly, there is a third scenario: to turn on the money printing machine. In this case the public will pay the “inflation tax”, but this is the least efficient way for the economy. Far from all manufacturers will have a chance to participate in price increases and they will simply begin to shut up shop," the finance minister said.
Meanwhile, head of the Federal Tax Service (FTS) Mikhail Mishustin added that sometimes it’s not essential to raise tax rates in order to collect more money. “For instance, let’s take the property tax. If real estate and other property are assessed in good faith, tax rates could be even reduced, while tax collections will increase," he pointed out.
