Long-Term Investments at the Stock Market Should Be Exempted fr om Tax

The RF Ministry of Finance discusses the possibility to equalize the tax assessment for interest yield fr om individuals' deposit, bonds and shares. It is suggested that there should be established a lim it of tax-exempt total income. It can be about 1mln rubles a year.
Currently, a special procedure of deposit tax assessment is effective. In accordance with that the deposit interest is tax-exempt if it does not exceed the level of the refinancing rate plus 5%.

In general case equalizing of the incomes from the individuals' deposits and of the stock market operations should be considered from the point of view of the progress in the Russian tax system, because it is obvious, that maximum incomes from these sources can be received by wealthier people and not poorer ones. It is because of this that in most developed countries the bank deposit incomes (from a certain amount) are subject to taxation.

At the same time, while speaking about equalizing of the RF tax conditions, the tax exemption of the long-term investments on the stock market should be spoken about, since now such incomes are taxed at the rate of 13%, while most bank deposits are tax-exempt. Such order obviously makes investments on the stock market less attractive for individuals, other economic stimuli being also weak.

Currently, the first priority task on the agenda is the attraction of long-term investments into the internal market. The effect of fiscal incomes collectable as a result of tax condition tightening can become unnoticeable due to underdevelopment of the Russian finance market and low share of internal savings.

I would like to note that it seems practical to lim it tax-exempt incomes expressed not in absolute figures (1 mln rubles) but in terms of percentage of the joint stock companies' registered capital (e.g. 1–2%) which allows "cutting off" transactions related to sales of business through the transactions with securities.

S.M. Drobyshevsky, Doctor of Science (Economics), Director of Center for Macroeconomics and Finance