Vladimir Putin met on Thursday with Head of the Federal Taxation Service Mikhail Mishustin, presidential web page reports. According to Mishustin, the share of shady transactions on VAT – something that the entire world monitors – is at a minimum level in Russia. The VAT gap is below 0.6%, one of the world’s lowest figures.
“The number of shell companies is decreasing due to our cooperation with Rosfinmonitoring, the Central Bank and law-enforcement agencies. Over six months ago we recorded a historical minimum, and now this figure is even lower. Today, shell companies comprise about 3.2% of the 120K legal entities registered in Russia. The times of such rogue companies with aggressive plans in the Russian economy are gone forever,” he said. “Tax on profit received from companies totalled about RUR 4 tln ($64 mio), which is 13.5% more than the respective period before. Importantly, the profits of revenue-earning companies went up by 8.4%. Income tax increased 8.4%, which is 1.2% more than the salary growth rate, plus about half a trillion rubles added to administration of insurance premiums. These are payments to the Pension Fund, Mandatory Medical Insurance Fund and the Social Insurance Fund. These are the results for 10 months. In our estimate, all key parameters in the macroeconomic forecast for the rest of this year will be reached.”
Mishustin also spoke about a tax on online services that are provided by foreign software producers in the Russian Federation.
“All foreign software producers rendering services to individuals in the digital economy in Russia had to pay VAT on those services so as to balance conditions with Russian companies that offered the same services. And since January 1, 2019, they are required to register with the tax service, and pay VAT themselves when working with legal entities,” he noted. “The tax revenue from foreign organizations will be about $1.4 bln, with minimal investment on our part. In other words, we have invested tens of millions of rubles in infrastructure, that is, software design.”