ALEXEY VEDEV:”I AM NEGATIVE ABOUT THE INTRODUCTION OF PROGRESSIVE TAXATION”

Alexey Vedev, Head of Financial Studies Department of the Gaidar Institute, commented to “MK” on the Vladimir Putin proposal to raise the PIT rate from 13% to 15% per year for those who earn over annual RUB 5 million.
“I am negative about this measure. First- of- all, the authorities have officially declared in 2018 that taxes will not be increased until 2024. Secondly, taxes will be collected at year- end from those individuals who earn over RUB 5 million per year. It means, with a long delay and, probably, not always correct.
Likewise, the impact of this situation on self-employed and individual entrepreneurs is not clear. I can foresee that many of them will have to go into litigation with tax service regarding the meaning of the net tax. There are certain inside subtleties and challenges. I assume that business climate and sustainability in the sphere of taxation is more important that those hypothetical benefits which can be obtained having raised the rate by 2% for some individuals”.