State Duma, the Russian parliament’s lower house, has supported in the first reading a package of bills on a new tax regime for self-employed – an initiative with no analogue in world practice, RIA Novosti reports.
If the bill is approved into law, four of Russia’s developed regions – Moscow, the Moscow and Kaluga Regions and Tatarstan – will be testing the new tax regime for a decade starting next year.
The preferential tax regime is designed for natural persons who earn without an employer and without attracting employees, do not have official jobs or a registered business. The tax rate will be 4% if the goods or services were provided to individuals, or 6% if the taxpayer served individual entrepreneurs or businesses. Limitations under the arrangement are RUR 2.4 mio ($36K) of revenue a year, that is, about 200K per month.
The tax is to be paid monthly using a special mobile app: there is no need to visit the tax authority. Those who use this preferential taxation will be exempt from personal income tax.
However, critics of the bill point out the high penalties for failure to pay the tax. According to Invest-Foresight, one of the sponsors of the initiative, United Russia’s MP Andrei Makarov, proposed introducing a fine for the self-employed in the amount of 100% of the income earned.