Russia Records Substantial 20% Increase in Non-Oil Tax Revenue Thanks to Economic Recovery

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Over the past 10 months, tax revenue has increased by almost 20%. The majority of this increase has had nothing to do with the oil or gas industries, according to Mikhail Mishustin, head of the Federal Taxation Service, during today's meeting with Vladimir Putin.

On the eve of their professional holiday, the President congratulated the tax authorities and asked about the results of their work, which included not only an increase in the revenue but also the adoption of new technologies. Our reporter, Denis Davydov, is reporting on how they will help the authorities and taxpayers as well.

160,000 people work in the Federal Taxation Service. On the eve of their professional holiday, the head of the Service was received by the President. The working meeting begins with some congratulations.

 

Putin: November 21 is your professional day, isn't it?

Mishustin: It is.

Putin: Congratulations to you and all of your staff on this professional holiday. I'd like to wish you all the best, to wish you success, the nation needs you to succeed after all.

This year the total tax revenue of Russia amounted to more than 14 trillion rubles, a 20% increase when compared to 2016. Index numbers of industrial production have increased. Processing machine-building enterprises are leading. As a result, they pay more taxes.

Mikhail Mishustin, Head of the FTS: The major part of the tax revenue comes not from the oil and gas industry but from income tax, which accounts for about 60% of the revenue increase, equal to 2.9 trillion rubles, which is 18.8% higher than in 2016. According to Rosstat, the economic growth over the last 9 month has amounted to 1.8% which is a pretty tangible revival.

There is an increase in personal income tax revenue, and alcohol excise duty. There's also been a major increase in the VAT revenue. It's largely thanks to the Service's initiative to introduce new tax offices, that instantly transfer data to the FTS. 1.5 million new machines have already been installed. They registered more than 10 trillion rubles.

Mishustin: Coupled with other information systems, this allows us to develop a monitoring system to control taxpayers and their sales in order to eliminate onsite audits altogether. As you said, for taxpayers, this is an opportunity to check…

Putin: That's what I wanted to ask. Is the mechanism operating?

Mishustin: It is. The first element is crucial. After buying a product a taxpayer can instantly check...

Putin: ...check what they paid for.

Mikhail: Exactly. Who they paid and for what. This element is important because it stimulates the people to pay attention to what they buy, who sold it and somehow makes them check the quality of the product.

Thanks to the online tax offices, the amount of fly-by-night companies has decreased threefold. The machines are convenient for business, too, as there's no need to go to the tax office. The taxes can be registered online. The FTS suggested Russia adopt these new tax offices universally by July 1, 2018. But Russian entrepreneurs asked Putin for a delay through the organization "OPORA Russia". Putin agreed, and the FTS changed its decision.

Mishustin: We'll give businesses time to prepare and analyze which types of business activity do not require the use of the equipment because for some of them there are no tax evasion risks.

Mikhail Mishustin pointed out that the number of tax inspections has decreased. There are more than 5 million private equities in Russia and only 15.5 inspections conducted. The online personal taxpayer account allows you to inquire and pay practically any tax from your computer at home or at work. Be it property tax or transport tax. Online transactions brought the FTS almost 38 billion rubles. Next year Russia will adopt the tax-free system, used in many countries. After buying something in Russia, foreigners will receive back the VAT. The innovation is likely to attract more tourists.

Denis Davydov, Maria Samsonova, Natalia Gubina for Vesti.

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