The government has decided to launch a tax reform, the media are writing

© RIA Novosti / Ilya Petliurite in fotomasterskaya coins. Archival photoThe government has decided to launch a tax reform, the media are writing© RIA Novosti / Ilya Petliurite the image Bank

The Russian government after years of dispute came to the conclusion that the tax reform is not needed, writes on Tuesday the newspaper «Vedomosti», citing a copy of the government report to the President on the discussions of tax reform.

Russian President Vladimir Putin a year ago, instructed the government to determine in 2017, the contours of the tax system for the next election cycle and enact all necessary legislation in 2018.

In the draft report sent to the government, the Finance Ministry has proposed two tax maneuver in oil industry (to zero export duty while raising the mineral extraction tax) for the whole economy (lower insurance premiums in exchange for the VAT rise). But the government offered the President to be limited to the commodity sector.

Through maneuver, the Finance Ministry wanted to reduce too high a load on the work – it is expected that this will contribute to the business’s from the shadows that will lead to growth of budget revenues. Maneuver would increase them in 2019-2020 almost 450 billion rubles, evaluates the official. But it was decided not to launch the reform – too many problems it entails, explains another official.

Officials acknowledge that the debate on tax reform may still go on – but in the new government after the elections. We discussed various sources of additional income, many of them – at the expense of the population. For example, it would be possible to give regions the right to introduce a sales tax instead of turnover tax on movable property, to cancel the preferential VAT rate of 10% for the part of products (applies to food, medicine, goods for children), telling several officials. Such tax changes are not discussed in the Ministry of Finance has not seen the proposals, said a Ministry spokesman.

No one knows who will be included in the next government, and will not dare to take responsibility for radical or unpopular reforms, explain officials. Acute need for additional income is not. But budget design can change – now in the authorities, the government and the Kremlin discussed the proposals of the Chairman of the Center for strategic research (CSR) Alexei Kudrin to increase spending on education, health and infrastructure, explain the two official and member of one of these meetings. This is a key proposal of the development strategy of Russia until 2024, which CSR has prepared for Putin. Investment in human capital and infrastructure is proposed to increase by 2.5% of GDP: education and infrastructure – 0.9% health care – 0.7% revealed part of the strategy Kudrin in his article. Based on the forecast of nominal GDP in 2018 for such a maneuver to almost 1.5 trillion rubles.