The tax system is an important source of funds for the state budget, from which many institutions and social services are paid. In 2018, serious changes took place in Russia: a number of tax rates increased, and new taxes appeared. You can read more about tax increases and how this will affect the well-being of ordinary people in this article.
Tax increase
In 2018, serious changes took place in Russia. No sooner had people come to terms with raising the retirement age, the news appeared that they were going to increase the rate of a number of taxes. The bill was submitted for consideration in the spring, and in the summer a final decision was made to increase income by value added. Changes will affect everyone, regardless of status and age. After all, an increase in VAT affects all goods and services, as well as food products that are in demand among all categories of citizens. At first glance, the increase in taxes is very inconspicuous: on average, they will increase by only 2-3%. All changes will take effect from January 2019.
The opinions of experts and politicians on the discussion of tax increases diverged. Some believe that this is a premature measure that will only slow down the growth of the economy. Others are confident that this will help ensure the well-being of pensioners and other vulnerable groups. After raising the tax rate, the burden will primarily fall on small and medium-sized businesses. As a result of this, everyone will feel a rise in prices. Only large manufacturing companies will be able to restrain price growth due to sales.
What taxes will increase?
In what areas are tax rate increases planned ? It is known that the following taxes will increase in 2019:
- VAT will increase from 18 to 20%.
- Excise payments for certain groups of goods (cigarettes and tobacco).
- The personal income tax rate will become progressive for people with income of more than 3 million rubles.
- The marginal base for insurance premiums will increase by 10-15 percent. Raising pension taxes is designed to increase the amount of pension for older people.
Despite the fact that so far few taxes have actually been raised, the process of introducing tax innovations has already begun in Russia. Most likely, the period of reform of the tax system will take more than one year, so you should not hope that the changes will end there. Russian President V.V. Putin officially promised that in 2018 the income tax will not be increased, and he kept his word. But the government is already hotly debating the increase and other tax rates. What projects are accepted for consideration?
Income tax
Personal income tax - it is also an income tax - it is a mandatory tax for all residents of the Russian Federation, which is paid on the money received. For the bulk of the population, it is 13%, and only for some categories of citizens with high incomes - 35%. In March 2018, a bill on increasing personal income tax from 13 to 15% was submitted to the State Duma. Most officials approved it, but no changes have been made so far. The increase in the tax rate caused a lot of discontent among the population. Since the pension reform has already been carried out in 2018 , the Ministry of Finance published a letter to citizens explaining that the tax will not be changed this year. Despite the deficit in the budget of the Russian Federation, an increase in the tax rate is not planned in 2019 and 2020.
An increase in income tax can bring not only harm, but also benefits. Experts are sure that raising the rate by two percent will not play a significant role in people's daily lives. And thanks to such a campaign, about 600 billion rubles will appear in the budget, which will be used for the needs of the population. In 2018, the economy does not grow, and reserve sources of budgetary funds are running out, so sooner or later the government is likely to approve the increase in personal income tax. But in the next few years, you can not worry about raising the income tax.
VAT
VAT is a value added tax, which helps to bring a lot of money to the budget. The tax is charged on all goods and products that are sold at a price higher than their cost. A tax increase of up to 20 percent is one of the most important news of 2018. The government decided to raise VAT in order to eliminate the budget deficit. At the same time, a tax rate increase of 2 percent will bring an additional 600 billion rubles. But is this measure justified? After all, an increase in VAT will affect the cost of goods and services, and will also seriously affect small and medium-sized businesses. What do experts think about this?
Raising VAT taxes will increase the rate of inflation. In addition, it will hit the most vulnerable areas that have already suffered after numerous crises and sanctions: high-tech production, engineering. This will affect the population, especially those people who are already below the poverty line. A tax increase of up to 20% will increase the cost of almost all food and basic necessities. The government plans to introduce preferential categories of products for which the tax rate will not increase: these are medical, children's goods and some others.
According to officials, raising VAT is necessary for state needs and stimulating economic growth. But an increase in the tax rate will only reduce the development of the economic system, and most of the small enterprises will cease to exist at all. Therefore, experts are skeptical of these changes and do not believe in the positive impact of the reform.
Changes in other taxes
Although the increase in VAT and personal income tax are the most discussed topics in 2018, these are not the only changes that have occurred in the tax system.
Starting in 2018, changes will be made to the transport tax. Citizens will be allowed not to pay longer: from now on, the deadlines will move until December, which will allow to accumulate the necessary amount.
Property tax will be calculated at the cadastral value of the property. Thus, even if you purchased land worth 200 thousand, and after a few years it already costs 500 thousand, then the tax will be calculated for you on the last digit.
In 2018, the privilege for real estate, which exempted from paying taxes in case of expiration of the statute of limitations, will be abolished. This was sad news for many owners, because now in any case they will have to pay 13% of the cost of housing to the state treasury.
In 2018, a resort fee was introduced , which is charged at the entrance to some regions of Russia. The changes affected Altai, Krasnodar, Stavropol regions and the Republic of Crimea. Changes will not affect preferential categories of the population.
All legal entities and individual entrepreneurs are obliged to switch to online cash desks, which will help the state track payments and keep a correct record of income. Now in any stores and outlets must have an online ticket office.
Trading fee increased. In 2018, the new rate is 1,285.
In the oil field, additional income tax will be introduced in 2019. The main objective of this tax is to stimulate the development and production of oil in mature fields.
In the State Duma, a bill on the introduction of a tax for self-employed citizens is under discussion. If it is adopted, the changes will affect 22 categories of citizens, including plumbers, tutors, hairdressers, photographers and freelancers.
Why raise taxes?
In May 2018, the president issued a decree setting a goal for the coming years. It includes the socio-economic development of the country, as well as improving the welfare of citizens. As part of the implementation of these laws, pension and tax reforms have been prescribed, which should contribute to the rapid implementation of goals. Experts estimate that it is planned to spend about eight trillion rubles to execute the decree. At the moment, there is no such money in the treasury, which is why I had to resort to the measure of raising taxes in Russia. Part of the necessary funds will be received by raising the retirement age, and the remaining due to an increase in VAT.
Russia currently has one of the lowest value-added taxes. In Europe, 20-23% of the value of the goods is considered the standard. The highest rates are in Finland and Norway, and the lowest are in Singapore and Thailand.
How will this affect the wallet
The VAT rate has been constant since January 2014. With a tax increase, manufacturers are unlikely to work to their own detriment. With a high degree of probability, they will include the amount of VAT in the final cost of the goods, and the entire burden of the tax burden will fall on the shoulders of consumers. On the one hand, raising taxes can bring new funds to the budget. On the other hand, many doubt whether this money will be used for the benefit of the population. In addition, the purchasing power of Russians is at the limit. High inflation and an endless series of crises have led people to spend their money very economically. After raising VAT, people will start to save even more, which will ultimately lead to lower consumption. Many industries will be unclaimed and contract, as a result, the economy will slow down its growth. As a result, the country's budget will continue to decline.
Bank experts believe that increasing VAT, as well as income tax in the future, will not bring anything good except momentary benefits. In the future, the Russian economy will undergo negative dynamics, and unprotected segments of the population will not be able to buy even basic necessities.
Pros and cons
In 2018, there were many topics for discussion: the World Cup, an increase in VAT, an increase in gas prices, an increase in the retirement age. A lot of changes do not allow disputes to subside so far. Some experts are of the opinion that the reforms were necessary, and without them the further development of the country is impossible. Others argue that the trillions of rubles raised will not change the standard of living of Russians, but they can lower it. Who is right?
Some Russians are not opposed to raising taxes. Indeed, this can provide them with a comfortable old age and a better quality of life. The problem is that the tax system in Russia is not transparent, and the population cannot see what needs budget funds are going to. Meanwhile, the VAT rate has risen; income tax is likely to rise in the next five years. Taxes on fuel excise taxes also increased strongly during 2018, which ultimately affected the increase in gas prices. Experts fear that by the end of the year the price per liter will exceed 50 rubles. An increase in the cost of fuel, coupled with an increase in the VAT rate, further increases the final cost of goods. Manufacturers will try to offset the cost of logistics, which will lead to higher prices for the final product.
The question is, will the funds really go to the benefit of the population? The Russians themselves are rather skeptical about this issue. The experience of the past few years clearly shows that raising taxes and introducing new ones not only does not spur the economy and purchasing power, but also contributes to the deterioration of the current situation. Over the past few years, more than half a million small enterprises have closed in Russia, which clearly demonstrates the "effectiveness" of such a program.
Expert opinion
Despite the discontent among the people, employees of the State Duma assess the upcoming changes mostly positively. Andrei Makarov states that the funds received are necessary for the state budget and will be used to develop health care, infrastructure and social spheres. In response to questions about increasing transport excise taxes, officials note that price fluctuations will not be significant. As for VAT and its impact on industry, according to the head of the Ministry of Industry and Trade, there will be no negative impact. Many experts talk about increasing inflation, but Andrei Makarov promises that this is a temporary phenomenon, and soon the situation will stabilize. The government expects an increase in investment and a reduction in unemployment. In general, State Duma employees expect only positive changes that will increase the well-being of citizens.
Summary
Tax payment is mandatory for all developed countries. It is at the expense of budgetary funds that the government provides medical services to the population, education, construction of new infrastructure facilities. Funds are taken from the federal budget for the payment of pensions and benefits for vulnerable groups of the population. Reducing economic growth in Russia has led to the need for significant changes in many structures, including the tax one. In 2018, a number of taxes were amended: property, land, transport, resort. Starting from January 2019, the VAT rate will be increased from 18 to 20%, and the State Duma is already debating about raising the income tax in Russia. Experts disagree on whether these changes will be positive. How sustainable small businesses will turn out, and whether many taxpayers will not want to "go underground" because of an excessive load, time will tell. So far, Russians should only expect rising prices for goods, starting in January 2019. However, the changes will not affect the vital categories: medicines, goods for children and some products.