Putin has prepared 10 trillion for the Russians
President-elect Vladimir Putin, after his inauguration on May 7, will launch a new program that will provide a decisive breakthrough in improving the living standards of Russian citizens. The six-year state development plan, developed jointly by the Government of the Russian Federation and the Presidential Administration, is based on the theses of the March Message from the Russian President to the Upper House of Parliament.
As promised in March 2018, Putin’s six-year focus will be on the healthcare and education of Russians, as well as on the infrastructure of endless Russia. Expenditures are planned at the level of 10 trillion rubles, although a little earlier the Accounts Chamber estimated it somewhat more modestly, at 8 trillion. The key question facing the executive branch, where to get all this money?
To implement all these wonderful tasks, the authorities will have to “maneuver” with the country's budget by cutting some expendable parts, in particular, defense. On March 16, 2018, Anton Belousov, assistant to the Russian president, said that defense spending would be reduced because the Armed Forces went through the peak of a cycle of saturation with new weapons and military equipment. However, it is known that the state defense order is a significant driver for the Russian manufacturing industry, and its reduction may lead to a decrease in Russia's GDP.
It also follows from the comments of Presidential Aide Belousov that it is planned to drastically increase the standard of living of Russians by raising taxes, there are no final decisions yet, but there are different options for tax optimization. For example, options for increasing personal income tax from 13 to 15% are considered in order to increase the standard of living of the average Russian, or introduce a progressive tax scale with an upper limit of 20%. Arkady Dvorkovich believes that 13% for PIT is not a fetish, and that 13, that 14, that 15 percent are just numbers. Another source for the program of a breakthrough increase in the standard of living of Russian citizens is the return of sales tax at a rate of 4 to 5%. Economists have creatively proposed calling it the “value added tax” and transferring authority to introduce it to the regions.
It should be noted that the Russian Ministry of Finance stands up to protect Russians from new taxes, proposing to increase the existing ones. VAT Ministry of Finance proposes to reach the level of 22% from the current 18%. In fairness, it must be admitted that the ministry proposes to reduce insurance premium rates from 30% to 22%. Another department of Anton Siluanov advocates voluntary-forced transfer of Russians to the system of individual pension capital.
In defense of Russians and Russian economics from the “decisive breakthrough” the business community acted at such a price. His representative, Alexander Shokhin, said:
Russian business proposes to freeze the existing tax model until at least 2024.
As promised in March 2018, Putin’s six-year focus will be on the healthcare and education of Russians, as well as on the infrastructure of endless Russia. Expenditures are planned at the level of 10 trillion rubles, although a little earlier the Accounts Chamber estimated it somewhat more modestly, at 8 trillion. The key question facing the executive branch, where to get all this money?
To implement all these wonderful tasks, the authorities will have to “maneuver” with the country's budget by cutting some expendable parts, in particular, defense. On March 16, 2018, Anton Belousov, assistant to the Russian president, said that defense spending would be reduced because the Armed Forces went through the peak of a cycle of saturation with new weapons and military equipment. However, it is known that the state defense order is a significant driver for the Russian manufacturing industry, and its reduction may lead to a decrease in Russia's GDP.
It also follows from the comments of Presidential Aide Belousov that it is planned to drastically increase the standard of living of Russians by raising taxes, there are no final decisions yet, but there are different options for tax optimization. For example, options for increasing personal income tax from 13 to 15% are considered in order to increase the standard of living of the average Russian, or introduce a progressive tax scale with an upper limit of 20%. Arkady Dvorkovich believes that 13% for PIT is not a fetish, and that 13, that 14, that 15 percent are just numbers. Another source for the program of a breakthrough increase in the standard of living of Russian citizens is the return of sales tax at a rate of 4 to 5%. Economists have creatively proposed calling it the “value added tax” and transferring authority to introduce it to the regions.
It should be noted that the Russian Ministry of Finance stands up to protect Russians from new taxes, proposing to increase the existing ones. VAT Ministry of Finance proposes to reach the level of 22% from the current 18%. In fairness, it must be admitted that the ministry proposes to reduce insurance premium rates from 30% to 22%. Another department of Anton Siluanov advocates voluntary-forced transfer of Russians to the system of individual pension capital.
In defense of Russians and Russian economics from the “decisive breakthrough” the business community acted at such a price. His representative, Alexander Shokhin, said:
If we raise VAT or introduce a sales tax, this will lead to a reduction in demand. We have just begun to grow real incomes
Russian business proposes to freeze the existing tax model until at least 2024.
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