Implementing the proposed measure would have undercut the budget, a senior official assessed
Russia’s Finance Ministry concluded that a proposed hike of the personal income tax for those working remotely from other countries would not have helped the national budget, a senior official has said, explaining why the idea was abandoned.
The ministry considered increasing the tax rate for employees of Russian businesses who are residing in a foreign jurisdiction from the current 13-15% to 30%. In April, it introduced draft legislation in the State Duma, Russia’s parliament, to enact the change but swiftly recalled it. Last month, it announced that the current system – under which residency status is irrelevant for the personal income tax – would be kept in place.
“If we introduced the 30% rate, businesses employing such people could create subsidiaries in other nations, and we would have lost both the personal income taxes and the [employer-covered] insurance contributions,” Deputy Finance Minister Aleksey Sazanov explained to journalists on the sidelines of the St. Petersburg International Economic Forum on Wednesday.
READ MORE: Russia reverses tax-hike plan for workers abroad
Russian businesses normally handle all payroll taxes for their wage-earning employees. The insurance contributions fund the national pension and healthcare systems and certain social benefits, such as paid maternity leave.
RT (Russia Today) is a state-owned news organization funded by the Russian government. The information provided by this news source is being included by the Libertarian Hub not as an endorsement of the Russian government, but rather because it is being actively censored by Big Tech, Western governments and the corporate press. During times of conflict it is imperative that we have access to both sides of the story so we can form our own opinions, even if both sides are spewing their own propaganda. The censorship of RT, despite likely being a propaganda outfit for the Russian government, reduces our ability to hear one side of the conflict. For that reason, the Libertarian Hub will temporarily republish the RSS feed from RT. Visit https://rt.com