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  Tuesday, April 7, 2020
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The value-added tax will not be cut within the coming three years
The value-added tax will not be cut within the coming three years, Russian Finance Minister Alexei Kudrin told reporters after a budget commission meeting. "After three years, we might get this issue back on the table," he said. There had been previous reports that the governmental staff had proposed cutting VAT from 18% to 13% and make it universal for all goods. Mr. Kudrin cited inflation, strengthening of the ruble and misuse of the Stabilization Fund to cover non-interest expenses as among the high risks a VAT cut could pose. He also said Prime Minister Mikhail Fradkov, upon reviewing a detailed analysis of possible tax cuts, agreed with the Finance Ministry. According to Mr. Kudrin, the budget commission also agreed to a tax proposals package submitted jointly by the Finance Ministry and Economic Development and Trade Ministry. The package included the provisions under which companies will be reimbursed for part of their paid VAT if they had made capital investments and corresponding losses will be collected in the future. Companies will also get a 10% investment premium on depreciation costs and will have the right to classify their R&D spending as liabilities. Beginning in 2007, exporters will only need to notify authorities in order to get a VAT refund on exported goods. "The Prime Minister has agreed that this package would be a more reasonable option for the budget, as well as for economic policies," Mr. Kudrin said "We cannot afford more radical options." The latest decisions will shape a three-year economic policy forecast, he said. At the previous March 5 session, the governmental budget commission members were still divided over future taxation policies. "The prime minister is showing signs of serious disagreement with economic ministries," a source in the commission said on the condition of anonymity. The differences include proposed VAT cuts. The source said that how the differences will be settled depends on which way the Russian economy will be heading in the future. "The matter of concern is not the calculation technique. It has to do with the choice of the economic model," he said.
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