Posted on 03/02/2005 11:12:49 PM PST by jb6
MOSCOW - VAT may be abolished two years from now and be replaced with a sales tax in Russia. The news came from Arkadiy Dvorkovich, chief of the presidential administration experts department, telling reporters that officials were studying the policy switch and its consequences.
“Obviously, this would be impossible in 2006, but it could be introduced beginning in 2007,” he said, adding that a sales tax of ten to fifteen percent should be introduced along with VAT’s disappearance.
“If a ten-percent sales tax is imposed, there will be no growth in prices,” Dvorkovich claimed. Plans were not yet finalized and calculations were being made.
But the conclusion that replacing VAT with a sales tax would not bring price inflation is likely to be challenged. While VAT can be refunded for companies - though with difficulty - sales tax would not be returned and its amount would likely find its way into prices. A ten percent sales tax could be expected to bring price rises of at least that amount.
In comments on VAT dropping from 18 percent to 13 percent, Dvorkovich said a decrease was necessary but that further calculations were needed to determine the exact rate. A flat rate would simplify collection. It would also eliminate losses from unjustified use of a discounted rate, currently a significant drain.
In earlier developments, finance minister Alexey Kudrin told the economic development and trade ministry that a decrease in the VAT rate to 13 percent in 2006 would cost the federal budget RUR362.1bn ($13.07bn), or 1.6 percent of GDP. The 13 percent proposal was submitted by Mikhail Kopeikin, deputy chief of the government’s staff, to Prime Minister Mikhail Fradkov at the end of January.
I think it's about time to look for some real estate in Russia.
"MOSCOW - VAT may be abolished two years from now and be replaced with a sales tax in Russia."
TAX PING
Are the Russians more advanced than we are? It seems like it -- at least in this respect.
I would certainly like to see the U.S. move to a NRST, and I would oppose the imposition of a VAT.
If it wasn't for medical and the brutal winters, Russia would be a wonderful place to retire.
"MOSCOW - VAT may be abolished two years from now and be replaced with a sales tax in Russia."
Definitely an interesting piece of news!!!
Consider, the oft quoted contentions of how great a VAT is, one is that no nation that has gone to a VAT has todate, repealed such. The second that VAT is a consequence of having a sales tax (the reality being the sales tax that has been the general cause of adoption of VAT in the EU being the European turnover taxes levied on business to business sales.)
Definitely a piece of news to keep an eye on.
A Taxreform bump for you all.
If you would like to be added to this ping list let me know.
John Linder in the House(HR25) & Saxby Chambliss Senate(S25), offer a comprehensive bill to kill all income and SS/Medicare payroll taxes outright, and provide a IRS free replacement in the form of a retail sales tax:
H.R.25,S.25
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.Refer for additional information:
Let's say they are more advanced in many areas including certain technologies and energy resources. Shouldn't we count ourselves lucky to be a border nation with them? I mean seriously, aren't you glad that the US is so far removed from Iraq?
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