Committing the ministries to find accountable for reduced collection of VAT may affect taxpayers in a few months already.
Photo: Sergey Mikheev
| Other Photos |
 |
|
 |
The Reduced Value
The root cause of one of today’s concerns of the cabinet is reduced collection of Value Added Tax (VAT) in Russia. Unlike other taxes, the growth in its receipts hasn’t exceeded 3 percent since early this year, signaling the collection has shed once the inflation is taken into account. As a result, Russia’s Finance Ministry, Economic Development and Trade Ministry and Federal Customs Service were committed to probe into the situation. The backlash of their investigation could be shelving introduction of declarative procedures for VAT refund to exporters that has been slated for January 2007.
According to the Federal Tax Service, the receipts of VAT fetched no more than 542 billion rubles from January to July, having increased 16 billion rubles (3 percent) on year. But the growth of 3 percent means no increase actually, as the collection was to step up by 7 percent just because of inflation.
Previously, the VAT has always generated a third of budget receipts.
The increased amount of refund is one of the reasons of decline in VAT, according to the Federal Tax Service. The exporters got back 426 billion rubles from January to July, 60 percent up on year. So, the refund-to-collection ratio (426 billion rubles to 542 billion rubles) equaled the unprecedented 78 percent (vs. 48 percent in 2005).
Contrary to VAT and excise on alcohol, which losses stem from the wine and spirits crisis in Russia, the collection of all other taxes is going up. The profit tax, for instance, manifested the annual growth of 38 percent, while the aggregate increase in tax revenues was 23 percent during the first seven months of this year.
The analysts blame the VAT reduction mostly on amendments to the Tax Code in part of the VAT collection, which took effect in 2006. The reasons, said Vsevolod Levi from Energy Consulting, could be shifting to paying the tax by shipment (when the tax and its refund are paid before receiving money under the deal), canceling taxation of advance payments under export operations, changing the VAT deduction for construction and assembly activities.
www.kommersant.com
All the Article in Russian as of Sep. 04, 2006
|
|
|
