Natalia Kornienko, Head of Tax System Development Department, stated to radio station “GovoritMoskva” that an incremental PIT counters the interests of households and exacerbates social tension.

“The epidemic situation is negative, incomes of households fall, overall economic growth goes down. To introduce a progressive scale with such high rates in this situation is to oppose the budget and the state to the interests of households. In this case, it is not the shortfall in revenues or deficiency of budgetary expectations that matter, but the tense social situation, which will worsen,” Natalia Kornienko noted.

Natalia Kornienko warned that tax for the wealthy will result in concealment of income. Consequently, payments will remain modest, however, contributions to funds decrease.

“It would be interesting if drafters of this idea showed the households’ and the budget incomes that they refer to. How many people have these incomes? After the introduction of the increased PIT rate, we can expect a rise, and then there will be a sharp decline. One has to remember that there are contributions to funds that are linked to these salaries. If part of the salaries goes underground, then the contributions to the funds will also be lost.

The goal is to receive additional revenues to the budgets by raising the rate, however, the economic situation or the industrial recession is not taken into consideration at all.

We put an end to all work related to the tax amnesty, to all other activities in this area. The tax burden should remain stable for those who pay taxes,” concluded Natalia Kornienko, the expert of the Gaidar Institute.