Chief of Federal Labor and Employment Service Maxim Topilin intends to finally crash under-the-table methods in economy.
Photo: Yury Martyanov
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Govt Sets Up Income Legalization Commissions
A regional chain of inter-departmental commissions on legalizing the under-the-table salaries will soon appear in Russia, said Maxim Topilin, chief of the Federal Labor and Employment Service. As nowadays, most of the salaries are paid legally in the country, the new commissions are likely to focus on widening salaries funds of employers irrespective of payment methods.
The legalization commissions, Topilin said, will include representatives of the Federal Tax Service, Federal Labor and Employment Service, social funds and regional tax divisions of Interior Departments and Public Prosecutor’s Offices.
But this effort of Russia’s government made against under-the-table salaries couldn’t be called timely. Most of salaries are quite legal now. The effective rate of individual income tax collected from January to July of this year (493.7 billion rubles) has neared the real rate of 13 percent, according to the calculation based on official statistics.
If the methods used by the Russian Statistics Committee could be ultimately trusted when it comes to the populace income, the number of people receiving under-the-table salaries in Russia doesn’t exceed 10 million now (of 65 million employed overall). In acceleration, the income tax collection (32.4-percent growth) is well above the growth in average nominal salaries (24.5 percent), which shows the legalization of the latter.
One of the reasons that prompted the bureaucrats to set up legalization commissions could be the response to the lame reduction in common social tax, which aggregate rate went down from 35.6 percent to 26 percent in 2005.
In Russia, the legalization of salaries is evident, but no material growth in the tax base has happened so far. Moreover, some employers tend to evade the common social tax and these cases are likely to become the concern of the commissions.
Indeed, the future activities of the commissions are easy to forecast. Once the under-the-table salaries become a rare thing, the officials will push for continuous extension of salaries funds, both the legal and illegal ones. “In three fourth of all cases, the employer won’t be efficient any longer, if he starts paying all these taxes,” said Yevgeny Gontmakher, who chiefs the Social Research Center.
www.kommersant.com
All the Article in Russian as of Sep. 05, 2006
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