Russian citizens have to give away more and more of their earnings for taxes and other obligatory payments.
Photo: Alexander Potapov
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Interest Rates Eat Up Income Growth
// Real incomes of citizens become reduced by retail banks and the state
The growth of real disposable incomes in 2006 reached 10.2 percent only, which is lower than in 2005. Russian Ministry of Economic Development and Trade published data yesterday which shows that citizens have to give away more and more of their earnings for taxes and other obligatory payments, first of all – interest on credits to commercial banks.
In 2006, personal incomes of Russian citizens grew faster than in 2005. However, disposable incomes, which remain after all taxes and obligatory payments are covered, grew slower. The Ministry of Economic Development and Trade published data that the “real disposable incomes” of citizens grew by 10.2 percent in 2006 (compared to 11.1 percent in 2005).
The Ministry thinks the growth of disposable incomes became slower due to “significant increase of obligatory payments and various fees” in 2006. The share of taxes in obligatory payments reached 32.2 percent in 2006, compared to 22.3 percent in 2005. Moreover, insurance payments doubled.
Another factor is the continuing consumer-crediting boom. The share of interest payments in obligatory payments grew to 14.4 percent in 2006, from 12.4 percent in 2005.
www.kommersant.com
All the Article in Russian as of Feb. 27, 2007
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