Bloomberg News

Russia Plans to Discuss Reinstating Sales Tax, Medvedev Says

December 04, 2012

Russia’s government will discuss reinstating the sales tax, a levy that may replace the value- added tax, Prime Minister Dmitry Medvedev said.

“The Finance Ministry always had serious arguments, but it seems to me the time has come to discuss the issue again,” Medvedev said today at a meeting outside Moscow with the Russian Union of Industrialists and Entrepreneurs, the nation’s big- business lobby, according to a transcript published on the government’s website. The government doesn’t want to raise the tax burden on the economy, according to Medvedev.

Russia, which stopped collecting the sales tax in 2004, discussed restoring the levy a year ago as part of an initiative led by then-President Medvedev to give more authority to regional governments. Every percentage point of VAT is equivalent to five percentage points of the sales tax in terms of budget revenue, Finance Minister Anton Siluanov said in a February interview with the Vedomosti newspaper.

Replacing the VAT would require the introduction of a 90 percent sales tax, Siluanov told Vedomosti. The Cabinet plans to discuss tax policy at a meeting on Dec. 26, Interfax reported, citing Deputy Finance Minister Sergei Shatalov.

To contact the reporter on this story: Olga Tanas in Moscow at otanas@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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