Russia’s Finance Minister Announces Tax System Changes

Russia plans to change the structure of the country’s tax system to make it more competitive, the country’s Finance Minister Anton Siluanov said Wednesday, adding that the tax burden will not be raised this year.

“We plan to change the structure of the tax system to make it more competitive,” he said, adding that there are no plans to increase the tax burden in 2018, Tass news agency reported.

According to Siluanov, the ministry proposes to restructure Russia’s tax system so that it fulfilled the main task of triggering the country’s economic growth. The tax system should help tackle the shadow economy, he added.

Meanwhile, chairman of the State Duma’s budget and taxes committee Andrey Makarov said that “the legislation, which used to be a driver, is now crippling the tax system.”

Some of the proposed tax changes are connected to an ongoing rift concerning U.S. sanctions for Russia. In December, Russian President Vladimir Putin said the country should scrap the 13 percent profit tax on funds repatriated from abroad and renew an amnesty from penalties for businesses returning capital.

Amid huge capital outflows in 2014, deteriorating relations with the West over the Ukraine conflict and weak oil prices, Moscow offered the amnesty for those returning capital to Russia. The amnesty, which expired in mid-2016, scrapped responsibility for past taxes and currency violations for those who declared assets abroad. But few agreed to take part in the amnesty.

Russian Finance Minister Anton Siluanov said in December that his ministry was proposing such an amnesty be restored in 2018 for at least a year.

Speaking at the meeting with the leadership of the Russian parliament, Putin said he had two proposals which he had not previously spoken about publicly.

“The first is to extend the amnesty timeline, I mean external restrictions are not easing, but, on the contrary, tending to rise,” he said.