Increase of tax for added value

The deputies of the State Duma of the Russian Federation approved in the first reading the government draft law, which makes it possible to raise the value-added tax rate from 18% to 20% from January 2019. Deputies believe that it’s time for businesses to pay for the lowered rate, which has been in effect since 2004. True, in today’s environment, an increase in VAT may slow the growth of the economy and “drop” GDP by 0.4%. The increase in the tax burden is required to fulfill the national development goals, which are defined in the “May decree”. Measures should bring in the budget 600-630 billion rubles of additional revenues per year. At the same time, the preferential rate of 10% and 0%, which is valid for a number of industries, is not planned to be changed. Thus, business related to export, the increase in VAT will not affect. The tax burden on the most important social goods and services will remain unchanged (it concerns food products, goods for children, medical services, medicines). The tax system needs to be tune-up, after which the government does not plan to make changes for six years. The VAT increase is hi to the surge in inflation - in 2019 it will exceed the Central Bank’s target of 4%. The growth of real wages will be less than 1%.