Russian Income Tax Collections Up By 54%

by Tatiana Smolenska, Tax-News.com, Moscow

29 August 2001

Last week the Russian government cabinet approved a development programme for tax collection for 2002-2004.

Minister for Taxes and Levies Gennadiy Bukayev told reporters that the programme was aimed at simplifying tax collection as well as at making the work of tax inspectors "clear and understandable for taxpayers". The aim of the programme is also to boost collectability of taxes by about three per cent, to boost the volume of voluntarily paid taxes and to cut the number of tax personnel by around eight per cent.

According to Bukayev, the federal budget will appropriate R2bn in 2002 to finance the programme, with a matching sum from regional budgets. All in all, it is planned to allocate R23bn for the programme, including a loan from the International Bank for Reconstruction and Development.

Bukayev said that the level of receipts of income tax had jumped by 54 per cent in the first seven months of 2001 as against the corresponding period last year, and predicted that there would be major changes in the pattern of submission of tax declarations flowing from changes that had been made to the Russian tax system.

The Minister said: "While in the past, the ministry was putting pressure on the rich, now all the poor will turn to us so as to receive tax deductions and social privileges".

Conspiracy theorists, probably echoed by 'the poor', driving their foreign cars paid for with black cash, suspect that the government's aim is to entice people into the tax system with rebates, then, once they have TINs (Taxpayer Identification Numbers), to wallop them with tax rates returned to their old, high levels.

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