Russian Tax System: Vision of the Future discussion at Gaidar Forum

The expert discussion, Russian Tax System: Vision of the Future, took place on January 17, the second day of 2018 Gaidar Forum, Russia and the World: Values and Virtues.

The second day of the Gaidar Forum at RANEPA began with an expert discussion on reforming the Russian tax system. The forum annually gathers international political, economic, and business experts. 

RANEPA Rector Vladimir Mau moderated the session; Chairman of the State Duma Budget and Tax Committee Andrei Makarov delivered a keynote report on the tax system.

The participants included Chairperson of Russia’s Accounts Chamber Tatyana Golikova; Finance Minister Anton Siluanov; Economic Development Minister Maxim Oreshkin; Head of the Federal Tax Service Mikhail Mishustin. The experts included President of the Russian Union of Industrialists and Entrepreneurs Alexander Shokhin; President of Business Russia, Chairman of the Board of Directors of R-Farm Group Alexei Repik; Acting Governor of the Ivanovo Region Stanislav Voskresensky; Governor of the Perm Region Maxim Reshetnikov; and Mikhail Orlov, Head of the Tax and Legal Consulting Department at KPMG Russia and the CIS, Public Ombudsman for Taxes under Russian Presidential Business Rights Commissioner.

The discussion focused on the problems of modifying the tax policy, reforming the legislation, and forming regional budgets.

Vladimir Mau opened the discussion, reminding the audience of a historical tax system model, the revolutionary impact on the state's fiscal function and regional tax policy. Taxes show that the state is effective and that there actually is a state, he said.

Andrei Makarov went on to express his opinion on tax legislation as the engine of the system. His report covered the drafting of tax legislation and the Tax Code reform. One of the key points in his report was the idea that legislation becomes an inhibitor for the tax system; he also spoke about the difficulties of applying the Tax Code, not only for individuals, but also for the tax authorities. Mr. Makarov spoke about the problems of the current legislation. The Tax Code has ceased to be a directly applicable law, he said; it was rewritten in various by-laws and contains more than 600 references to them. The expert outlined two ways of developing the system: adopting a new Tax Code or keeping the existing legislation. Another major point he made was that the tax system is not competitive and that there is a need for a clear differentiation between tax nature and non-tax nature. He also touched upon such issues as reducing the tax burden, developing new ways to raise funds, merging social insurance funds, creating a single social tax and developing trust in the tax system.

During the discussion, Vladimir Mau asked the participants to answer the questions, whether the tax burden is high or low; and whether an amnesty of capital is needed.

Anton Siluanov spoke about the tax burden. In his opinion, this question is rhetorical and needs to be considered from two perspectives – as a resource or as a gauge to estimate whether to make investments or not. The tax service will be more technology-based, which should become a prerequisite for augmenting the budget, the minister said. Regarding the capital amnesty, the expert said it will be held later this year, according to a Presidential order. Alexei Repik, Tatyana Golikova, Stanislav Voskresensky, Mikhail Orlov, Alexander Shokhin, and Maxim Reshetnikov also expressed their opinion.

Mr. Siluanov summarized the session, underlining the need to resolve the problems of the tax system and its superstructure to attain the key goals – fill the state coffers, update the system's technology, adjusting the system without increasing the tax burden, for its continued stable operation.

Vladimir Mau summed up the discussion, noting that the tax system is one of the few working institutions built through the efforts of many experts.

The organizers include the Presidential Academy of National Economy and Public Administration (RANEPA), the Gaidar Institute for Economic Policy (Gaidar Institute) and the Association of Innovative Regions of Russia (AIRR).

The program outline is available at the forum website.

Participation is free; preliminary registration is required.

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