Tuesday, July 23

Capital tax amnesty will last for the second year

Pinterest LinkedIn Tumblr +

Capital tax amnesty will continue in 2021

According to a recent statement by the President of the Russian Federation, Vladimir Putin, the tax amnesty for residents of the state will be extended for another year. Immediately after this statement came the official speech of Anton Siluanov, First Deputy Prime Minister, in which it was said that the past amnesty has already resulted in the return of more than 10 billion euros.
It is worth noting that 10 billion is quite an impressive amount for the Russian economy. Especially when you consider that the expenditure part of the budget amounted to 17 trillion rubles. Thus, the return is equal to one trillion, which is not a bad indicator. However, it should be taken into account that this amount is returned capital, not tax revenues from them. To have a significant impact on the budget, these amounts need to increase by an order of magnitude.
Experts’ opinions are divided about the tax amnesty, but they all have a common tendency – such decisions should not be taken too often. Otherwise, companies and residents begin to view these actions as a permanent reduction in taxes and as a result try to avoid increasing the tax burden.

What is the purpose of the capital tax amnesty?

In addition, judging from the experience of neighbors, such a system should be introduced by the state for a short period with a single goal – to replenish the state budget in times of crisis. Also, after the amnesty it is traditionally assumed to change the tax legislation and the degree of pressure in administration.
Few people use this system to improve the investment climate, except for Kazakhstan, but Russia has the opposite situation. The state has a profitable budget at the moment, the tax revenue has already been increased by raising VAT and excises. That’s why an amnesty program which is not so significant in volume will give a limited result. And here the investment climate in the presence of consistency in the actions of the state should improve.

According to experts, it’s hard to guess what results will be achieved by the Russian economy, holding another round of tax amnesties. However, experts stress that the state should not incur any special losses.
By the way, experts have for years advised the authorities to increase the popularity of tax amnesties by attracting celebrities. This is exactly what Spain did in its time, by suing Cristiano Ronaldo for improperly paid taxes.
Yes, this is not an example of tax amnesty, but it is a clear demonstration that no one can get away with not paying taxes, and it automatically affects the rest of the citizens. Judging from this study, working with celebrities can greatly increase the amount and degree of participation in the amnesty program. In Germany, for example, more detailed media reports on such glaring cases helped the campaign immensely.
Unfortunately, tax amnesty may be less effective in returning capitals than sanctions imposed on Russian citizens by foreign countries. So far, figures on the volume of refunds due to sanctions measures have not been disclosed by the authorities, but according to our estimates, in 2017 they could amount to about $1 billion.

Share.

Comments are closed.