Package of Tax Privileges Will Cost RUR 250 Billion to Budget

At one of the latest meetings of the RF Government when discussing the main direction for the tax policy in the middle-term, Prime Minister Vladimir Putin suggested exempting the commercial organizations operating in the field of education and health care from profit tax, which should have a positive effect on availability and quality of services in these spheres.

It is also proposed to grant a number of tax privileges for innovative business, which also should influence positively their investment attractiveness and stimulation of the demand for their goods. At the same time it should be remembered that this concerns not the privileges but rather correction of the existing tax structure, bringing it into correspondence with the current challenges and needs of innovative enterprises: specification of amortization accounting, taxation of deals with intellectual property and specific property, simplification of the procedure for tax administration, including for the export etc.

According to the estimation of the RF Ministry of Finance, the volume of the incomes losses from granted preferences to innovative business and exemption from profit tax of the commercial organizations in the field of education and health care will make approximately RUR 100 billion in 2011 and another RUR 100-150 billion in 2012. In other words, this means that the tax earnings of 0.2-0.3% of the GDP will not be received annually, which, in fact, should not have any considerable consequences for the balance of the budgetary system of the country taking into account the fact that the volume of tax earnings from the main taxes (not taking into account insurance contributions and customs duties) to the budget of the expanded government of the Russian Federation did not drop below 20% of the GDP in the recent years, and the acutest stage of the crisis has already passed.

Sokolov I.A. – PhD, Head of the Department of Budget Policy