NATALIA KORNIENKO: “TAX INCREASE IN THE WAKE OF CRISIS IS NOT A POPULAR MEASURE”
Natalia Kornienko, Head of Tax System Development Department of the Gaidar Institute, commented to OSNMEDIA on the initiative to raise PIT up to 15% for Russians earning over RUB 5 million per year.
On June 23, Vladimir Putin, the President of Russia, proposed to increase the PIT to 15% as from January 1, 2021. This increase will involve only those Russians who earn over RUB 5 million per year. Funds that will have been received will be targeted for treatment of children suffering from severe illnesses and conducting of highly-technological operations.
Natalia Kornienko said: “Putin has announced already the second PIT increase amid crisis. However, in time of elections, members of the government and himself promised to avoid the increase of taxation”.
According to expert, targeting taxes for treatment of “orphan” children diseases is important and needed.
“However, another matter is important: the President pledged his word and refused it as soon as the situation turned to be more challenging in the country. The whole world is undergoing through the crisis experience, however, there is no data that someone increased PIT even in the mid-term period. This is an extremely unpopular measure. At the state level, we still do not see all the economic consequences of what happened, but we already know from WHO and the President of the Russian Federation that there may be a second wave of coronavirus in the coming fall. This is very alarming,” Natalia Kornienko believes.
The expert also noted that the economic difficulties that came down on Russia are associated not only with COVID-19.
Natalia Kornienko concluded: “We are already introducing the second PIT over this period of time. The first tax concerned deposits over RUB 1 million. If it is impossible to grant compensations to all those who have suffered, as developed countries did it, then, the restraint related to the increase of tax burden could probably be more merciful in regard to the country population”.
Natalia Kornienko said: “Putin has announced already the second PIT increase amid crisis. However, in time of elections, members of the government and himself promised to avoid the increase of taxation”.
According to expert, targeting taxes for treatment of “orphan” children diseases is important and needed.
“However, another matter is important: the President pledged his word and refused it as soon as the situation turned to be more challenging in the country. The whole world is undergoing through the crisis experience, however, there is no data that someone increased PIT even in the mid-term period. This is an extremely unpopular measure. At the state level, we still do not see all the economic consequences of what happened, but we already know from WHO and the President of the Russian Federation that there may be a second wave of coronavirus in the coming fall. This is very alarming,” Natalia Kornienko believes.
The expert also noted that the economic difficulties that came down on Russia are associated not only with COVID-19.
Natalia Kornienko concluded: “We are already introducing the second PIT over this period of time. The first tax concerned deposits over RUB 1 million. If it is impossible to grant compensations to all those who have suffered, as developed countries did it, then, the restraint related to the increase of tax burden could probably be more merciful in regard to the country population”.