Russia: President Signs VAT Increase Bill

UrBC, Moscow, August 7, 2018. Russian President Vladimir Putin signed the new legislation to increase the value-added tax from 18% to 20% on August 3, 2018. The full text is now available on the Kremlin’s website.

The new bill also sets the obligatory retirement insurance rate at 22% (within the current upper limit) and at 10% for anything beyond the taxation base. Additionally, there will still be a zero VAT on air travel in the Far Eastern Federal District. The new law comes into effect on January 1, 2019.

The bill was presented to the State Duma on June 16 and signed in the third reading on July 24. The resulting tax revenues are estimated at RUR 620bn a year.

Analysts believe, however, that consumer prices will go up 0.8% to 1.25% and the inflation rate will rise by over 4%, at least for the time being.


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