The Ministry of Finance explained the reluctance to increase personal income tax on the rich with risks for savings

Russians who manage to save pay a lower percentage of taxes relative to their income, but this is not a reason to introduce an additional personal income tax step. This point of view was expressed by Secretary of State and Deputy Minister of Finance Alexey Sazanov in an interview with Vedomosti. Its full version will be published on October 16.

“The lower the income, the higher the share of indirect taxes as a percentage of it [такие граждане больше тратят на текущее потребление, а в цену покупок часто заложены НДС, акцизы и др. виды косвенных платежей – “Ведомости”],” Sazanov admitted, answering the corresponding question. – But here we must understand that savings are a source of investment in the economy, which is extremely important for creating new jobs and long-term economic growth. Therefore, people who save part of their income rather than spend it on current consumption are no less important for the economy.”

In his opinion, savings are especially important in the current period, when Russia is cut off from external borrowing markets. He emphasized that the introduction of such a progressive scale, which would disincentivize savings and contribute to an increase in current consumption, “is a road to nowhere.” Limited access of businesses to investment resources will lead to a halt in economic growth, Sazanov concluded.

Formally, personal income tax is the only direct tax on personal income. But in fact, Russians pay various indirect taxes, which manufacturers and sellers include in the price of goods. First of all, this is VAT – the general rate of which is 20%, but, for example, a number of socially important goods are taxed at lower rates. In addition to this tax, consumers pay such indirect types of payments as excise taxes on cigarettes, alcohol, and so on.

A flat personal income tax scale has been in effect in Russia since 2001. Starting in 2021, the authorities have introduced an additional step: wealthy Russians now pay a tax of 15% on income over 5 million rubles. in year. The general rate for all is 13%.

According to Sazanov, the transition to a progressive scale did not lead to taxpayers evading payment at a higher rate. Fears about a possible move into the shadows were not justified, the deputy minister noted. According to him, income is growing faster than inflation: in 2023, revenue will increase to 162 billion rubles.

“The tax base is growing even faster than inflation – if in 2022 revenues from the increased rate amounted to 149 billion, then in 2023 the estimate is already more than 162 billion. This is happening both due to rising wages and due to improved administration from Federal Tax Service,” Sazanov said.