Ministry of Finance announced tax reform amid the collapse of budget revenues due to the war

The Ministry of Finance announced tax changes amid a collapse in budget revenues due to sanctions and restrictions caused by the war against Ukraine. Finance Minister Anton Siluanov announced a possible reform of the tax architecture of Russia, whose words are reported by TASS.

“We always adjust our tax policy to the tasks of the current day that we are going to solve. Therefore, it cannot be said that taxes are such an unshakable component, ”said the head of the Ministry of Finance, recognizing that changes could be introduced in the next three years.

Speaking at a meeting of the State Duma Committee on Budget and Taxes, Siluanov promised that the decisions would be "balanced". The minister is announcing the reform of the tax system at a time when the Russian budget is suffering from a sharp drop in tax revenues. So far, the budget has been kept from a collapse in revenues by oil and gas revenues, which, against the backdrop of record prices, are kept at acceptable levels, but even against such a background, the Ministry of Finance expects to end the year with a deficit of 1.665 trillion rubles instead of a surplus of 1.327 trillion rubles.

At the same time, according to the forecasts of the Ministry of Finance, budget revenues will not be enough for four years in a row: in 2023, the deficit is expected at the level of 1.591 trillion rubles, in 2024 - 1.413 trillion, in 2025 - 1.358 trillion, in total - more than 6 trillion rubles. Moreover, the main budget expenditures, according to the minister, will be associated with overcoming the consequences of sanctions. For these purposes, 400 billion rubles will be allocated in 2022, and more than 2.5 trillion rubles in 2025.

In case of adoption of changes in the tax legislation, the minister will again break his promise. So, in 2018, Siluanov promised not to change the tax architecture of Russia in the next 6 years, but he failed to keep his promise: in 2020, the authorities approved an increase in personal income tax for the “rich”, introducing an increased rate of 15% per annum from 2021. After that, the head of the Ministry of Finance again promised not to touch the main taxes (VAT, personal income tax and profit) for three years, and at the beginning of 2022 he repeated his “definitely no”.

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