Alexei Kudrin — RBC: “large-Scale reforms will be possible after the elections”

The head of CSR Alexei Kudrin told RBC at the Sochi investment forum, which taxes may rise if you need to shift social contributions to the citizens and what challenges to decide the winner of the presidential elections in 2018

“Legislation is changing not for the better”

— Yesterday, Prime Minister Dmitry Medvedev met with business, and business was presented to the Prime Minister their proposals. They are known to you?

— It was a meeting with the Prime Minister in a special format, I was not in it. However, I know of these suggestions. Yesterday they sounded in the speeches of the representatives of the RSPP (Russian Union of Industrialists and entrepreneurs. — RBC) in various panels and concerned the variability of the legislation. Legislation is changing not for the better: it creates new areas of regulation and regulatory mechanisms. These are spontaneous, inconsistent with the business steps complicate the work of the companies.

Of course, the business interest and taxes. As you know, the President gave an assignment this year to determine the tax policy for many years to come. Discussed providing supervision and oversight is redundant, it is extremely a lot of checks, especially in successful companies. In unsuccessful companies checks almost there, in successful companies of their several a day from different Federal agencies, including law enforcement. This is very troubling. Another topic is a major difficulty in attracting funds for major projects, although the market has available resources. West, who had previously been a major source of these funds, now they are not giving. So now considering the idea of joint implementation of such projects the government and business, especially in demanding industries such as high tech. Today, the business feels will not do without state support in this work.

— The mechanism of public-private partnership (PPP) for this?

— Need to update its format and scale. There are several foundations which support such projects, but with large projects such as the construction of the plant, funds do not always cope. This requires more resources, which become harder to find in the market. These are key questions that concern business.

“The government is serious disagreement about the tax maneuver”

— Let’s talk about tax reform. How do you feel about the idea of reducing insurance premiums and increasing VAT? Optimal is the ratio 21% 21%?

— As far as I know, these proposals are not put forward because the government is serious disagreement about this. Scheme 21% 21% suggests that 21% is the insurance premium that is paid to the Pension Fund, mandatory medical insurance Fund and social insurance Fund, and 21% VAT. In this case, the current VAT of 18% will increase by 3 percentage points and the rate of insurance contributions, by contrast, will fall from 30% to 21%. According to the social block of the government, such a model will lead to a significant reduction of budget revenues, about 500-600 billion rubles.

Source substitution not?

The sources of substitution are not available in this case. If will be abolished reduced VAT rate of 10%, which now applies to food, children’s products and some printed materials, the gap will be less in the range of 100-200 billion RUB But I have not heard of proposals to reduce this rate.

While 21% 21% Pension Fund will receive less revenue from insurance premiums and will have to get more subsidies from the Federal budget. Thus, the costs of the pension system will compete with other budget expenditures. According to some bold proposals, a Pension Fund should incorporate into the budget system. This proposal was so radical that it today has not found full support in the government and is now being discussed. That’s why in the panel discussions in which I participated, the government did not put forward these proposals and brought them as their own. The previous sentence was a scheme of 22% of 22%. It is more neutral and does not reduce revenues. But it also finds direct support in the government.

“In Russia the taxation of citizens is less than in other countries”

— Whether the income tax act as a source of compensation for lost income?

— With the initiative to increase personal income tax are not government experts, and experts working with CSR. We were instructed to work out proposals to ensure a balanced budget system and economic growth with the growth of expenditure on education, health and infrastructure. In large part, these costs relate to the subjects of the Russian Federation. There we have schools, medicine, roads. Of course, medicine high technology, higher education and roads of Federal importance belong to the Federal level, but in the proportions of most of these areas refers to the area of responsibility of regions. Personal income tax — the income of the constituent entities of the Russian Federation, he is usually credited actors. The idea to increase spending on these sectors, to raise personal income tax by 2 percentage points to 15% and thus to support the regions. The regions have today a very difficult situation with debt, so any proposals aimed at stabilizing the situation, balancing the budget and taking into account the increase in spending on priority sectors. Now TSSR their studies, but we have not yet prepared their final proposals.

— You definitely have my own idea how to do all this and build?

— We are studying different options. To what extent VAT is even more neutral than all the other taxes. We very carefully approach the burden on business. Now in proposals compete for VAT and personal income tax. In Russia we have less taxation of citizens than in other countries. For example, the social contributions in other countries are paid mostly not employers, and the public, and we have this burden lies on the employer. That’s why today discusses options for changing the tax structure and tax burden on different groups of taxpayers. But we haven’t made any decisions.

Transposition of social security contributions on the population is socially dangerous initiative.

— Today the employer pays and is liable for the tax. It is expected that he will continue to lay this money in salary, but the responsibility will be shifted onto the population. That is, wages will increase by the amount of contributions and pay will be the citizens themselves. And then this load will be different. When deficient from the point of view of labor resources in the economy, wages will rise and citizens will be easier to pay taxes, excess salary grows slowly and the load is more sensitive. When you change the system people usually do not feel it, but then taxes begin to live your life.

— What role do you see yourself in the development of proposals to the government?

— I help prepare a number of government programs, but my participation in their execution depends on many circumstances, which I can’t talk.

— Maybe you will be part of the government or administeri body?

— We do not know how after the presidential election will be the government who will head it. It is difficult to say.

“If the presidential candidate will receive the vote of confidence, the election turnout will be high”

— Now for the authorities is a very important task — to increase the turnout at presidential election in 2018, to increase the confidence of citizens in elections. Maybe you can see some of the tools that you need for this use?

I don’t do preparations for the election, that’s not my field, I will not make any proposals in this regard. From any elections I wait for the announcements of the measures associated with the country facing challenges: demographics, the gap in technological development, low growth, lack of long-overdue structural reforms, as well as some distancing from the rest of the world in connection with the sanctions. You need to meet these challenges. If the announced measures will appeal to people and will meet their expectations, the turnout will be high.

— Do you think major reforms are possible only after the presidential election?

— Yes, of course. Before the election, they usually are not held. But in the programs they show up. The changes themselves occur after the electoral process. We have ahead of presidential elections: if the President gets a vote of confidence if it is high, it is easier to make the changes.

— What do you think about the latest “scandal” in the statistics. Estimates of GDP growth to VEB and Rosstat quite significantly dispersed. Can we trust the statistics?

— GDP can be computed by refining the methodology and statistics of them periodically clarifies that what is happening in the economy changes. Sometimes we need to change the scope of the accounting of individual indicators to include additional indicators in the assessment of GDP. In this sense, I don’t mind change techniques. I don’t know whether it was to do now. For a more objective analysis of the situation in the next year or two to check it with the old methods, it is possible to discuss different approaches. In General, of course, update of statistical methods is inevitable.

— Do you think the transparent privatization of 19.5% stake in Rosneft?

No, I don’t think this deal is transparent. I think it creates for Russia image risks. Today, many investors in the world are wondering: who bears the transaction, the main risks? I also don’t know that. It is obvious that the risks are somehow distributed, but we do not see. Loans, and loans in Russia, there are risks associated with the oil prices, the capitalization of companies, the price of those shares that were sold. I believe that the state should not take steps that create this kind of uncertainty. Privatization transactions should be on a competitive basis and to always be transparent and understandable.

with the participation of Oleg Makarov

Be the first to comment

Leave a Reply

Login: