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Sergei Ivanenko expects serious battles in the Duma during discussion of the tax initiatives of the Government

The Yabloko and SPS factions to support in the second reading the adoption of a 13% flat rate of income tax

 

Press release, 07.06.2000

 

The Yabloko faction will support the proposals of the government on income tax, though it considers that Yabloko's proposals would be more efficient

The Yabloko faction will vote for the 13% income tax rate - Part II of the RF Tax Code (Chapter 24) - that is currently being considered by the State Duma

A reduction in tax rates and deduction of costs in a bid to legalise undisclosed incomes is the slogan of Yabloko-s tax reforms, stipulated in all the programme documents of Yabloko.

Accordingly, representatives of the Yabloko faction in the Committee for the Budget and Taxes of the State Duma (deputies Mikhail Zadornov, Alexei Mikhailov and member of the expert Council with the Committee Sergei Don) submitted a proposal for a two-level scale for income tax: 10-13% and 20-25%, including a simultaneous deduction of part of their expenditures from the tax base for individuals earning high incomes.

This concerns primarily the spheres where cash payments are especially high (and, consequently, the share of the shadow economy), for example, in payments for education, health care, the purchase of domestic pharmaceuticals, construction materials, car spare parts, etc.

In this way it would be possible to legalise citizens- expenditures by reducing the rate of income tax that they pay. According to different expert estimates, by introducing such a tax amnesty Russia-s economy could obtain $30-50 bln (presently kept as cash in hands of the population) and $100-150 bln (Russian capital abroad).

Representatives of the Yabloko faction have been insisting on introduction of these amendments to the tax law for the past two years. At last, this proposal has been considered by the Duma Committee of a corresponding profile.

However, the government has adopted a less efficient course, which envisages the establishment of a single income tax rate, which provides less of an incentive for the return of money from the shadow economy. Nevertheless, the faction has decided to support the government-s draft, which would be more adequate to the present economic situation in Russia, than the present tax system.

See also:

Sergei Ivanenko expects serious battles in the Duma during discussion of the tax initiatives of the Government

The Yabloko and SPS factions to support in the second reading the adoption of a 13% flat rate of income tax