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Taxation In Russia

Дата публикации: 04 сентября 2007
Публикатор: Научная библиотека Порталус
Рубрика: RUSSIA (TOPICS) ECONOMY →
Источник: (c) http://russia.by
Номер публикации: №1188911854


Russia's tax system has historically been confusing, inefficient, unwieldy, and overbearing. Businesses and individuals routinely fail to pay their taxes on time, if at all. The government's need for money to pay pensions and salaries fueled a proliferation of taxes, including a tax on people crossing Russia's borders, additional levies on freight, new transit fees, and a tax on yields from government securities. In 1996, 26 tax collectors were killed, six were kidnapped, and 41 had their homes burned down. In the first half of 1997, the government only collected 57% of its targeted tax revenues.

Since 1999, the tax system has been the focus of a major reform effort aimed at reducing tax loads, improving collection rates, and bringing the system in line with those of advanced, market economies. The new Tax Code cut the number of official taxes from over 200 to about 40, and sought to end many loopholes. Part One of the new Tax Code, effective 1 January 1999, set out the administrative framework for the new system. There are three levels of taxation, federal, regional, and local. The principal taxes collected at the federal level are the profit tax on organizations (with payments divided among all three levels of government), a capital gains tax, a personal income tax (13% flat tax), the Unified Social Tax (replacing payroll contributions to four separate social benefit funds), a value-added tax (VAT--with the standard rate of 18% as of 2005), excise taxes, a securities tax (0.8% on nominal value with exemptions for initial issues), customs duties and customs fees, and federal license fees. At the regional level the principal taxes are an assets tax (2.2%), a real estate tax, a transport tax, sales taxes (maximum 5% in 2003), a tax on gambling, and regional license fees. Two turnover taxes at the state level, a social infrastructure maintenance tax (Housing Fund Tax) and a road users' tax, considered to be among the most onerous under the previous tax system, have been abolished; the Housing Fund Tax in 2001, and the roads tax in 2003. At the local level there are land taxes, individual property taxes, taxes on advertising expenses (beyond allowable limits as a proportion of sales), inheritance and gift taxes, and local license fees.

As of 2005, the corporate income tax was 24%, with payments split 5% to the federal budget, 13-17% payable to the regional governments, and 2% to the local level. Because regional governments are allowed to reduce their corporate rate to as low as 13%, the total minimum rate is 20%. Foreign companies pay withholding of 20%, and dividends paid to nonresidents are charged a 15% withholding rate (down from 18%).

The most striking provision in Russia's 1999 tax reforms is the replacement of its progressive income tax schedule (set out in the tax law of December 1991 with rates from 12-30%) with a flat tax of 13% applied to almost all income categories. The rationale is that the lower, simpler tax will generate more revenue by reducing Russia's pervasive tax-evasion. Exceptions to the 13% rate include a 15% rate on dividend income and on the income of nonresidents from Russian sources. There are also taxes on gambling income, lottery prizes, deemed income from low-interest or interest-free loans, some insurance payments, and excessive bank interest. The Unified Social Tax is a regressive schedule of payroll taxes ranging from 35.6-2% and is based on the gross income received by the employee. All voluntary insurance payments are tax deductible.

Russia's VAT, its main indirect tax, had a standard rate of 18% as of January 2005 that was scheduled to 16% as of January 2006. Exemptions from VAT for pharmaceuticals and license fees have been narrowed or removed. There are also excise taxes on items such as gasoline and other oil products, natural gas, alcohol, tobacco, and cars, motorcycles, and jewelry.

Опубликовано на Порталусе 04 сентября 2007 года

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