The Russian Finance Ministry's tax amnesty proposal will be the focus of a Cabinet session today

Tuesday, October 20, 2020

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The spokesman said Finance Minister Alexei Kudrin would inform his colleagues about the plan. Kudrin proposed introducing tax amnesty legislation at a meeting with President Vladimir Putin and fellow Cabinet ministers earlier this week. He said it would allow individuals to pay outstanding tax on capital moved off-shore at a flat rate of 13%, exempting them from any penalties under existing tax laws that may have applied for not declaring past income. The minister said this legislation would make it possible for the government to "reinvigorate the situation, promote the legalization of wages, and allay people's fears over major purchases, encouraging them to use [previously undeclared] income for personal needs and for investment in small businesses or shares." Economic Development and Trade Minister German Gref called the proposed tax amnesty a step in the right direction, but said the ultimate solution to the problem of capital flight lay in improving the investment climate. Speaking to reporters Tuesday, he described the proposed measure as "useful," but cautioned against seeing it as a silver bullet. But he agreed it would provide an opportunity to encourage undeclared income back into the national economy. Alexander Shokhin, who heads the coordinating council for entrepreneurial associations, also argued that the tax amnesty could be effective only if coupled with measures to create a favorable investment climate. He told RIA Novosti that the government should make sure the scheme did not become "a bait for naive people." The Finance Ministry must provide guarantees on the government's behalf that the new law will not be used for exposing less than honest taxpayers, said Shokhin.

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