Russians can be prompted to dutifully pay their taxes and choose transparent employment contracts over working in the informal sector by several simple changes. As experts from the Russian Presidential Academy of National Economy and Public Administration (RANEPA) found out, it may be enough just to make the tax policy more clear and consistent, and most importantly, fair.
According to a study of the “Shadow labor market and proposals to reduce it,” most Russians are discontent with the current level of taxation – 45.1% of respondents said lower taxes could improve tax collection. Another important factor is the equality of all taxpayers before the law, according to 30% of respondents. On the other hand, fear of punishment for tax evasion also compels them to pay up (31.5%).
According to the study, every second survey participant mentioned the current tax policy being unfair. People are unhappy with the inconsistency of existing rules and regulations, which often makes them reluctant to comply.
About 25 mio Russians are employed in the so-called shadow sector of the economy – about a third of the country’s workforce, RANEPA experts concluded. More than 70% of Russians quite approve of getting paid a “backdoor” or “envelope salary.” Moreover, the number of such people is growing, which is an alarming sign. Only two years ago, just over 50% of respondents in a similar study said so.
Overall, the study canvassed 1,215 people from 27 regions, from public and private companies.