Translated material
Ordered: survive!
The government turns on the tax press again
Prime Minister Vladimir Putin announced that the insurance premium rate will rise from the current 26% to 34% next year. This put an end to the protracted dispute over the tax percentage, which was waged by the ministries of finance, economic development and health. What threatens the economy with increased fiscal burden - The New Times found out
These 34% include payments to the Pension Fund, the Social Insurance Fund and the Compulsory Medical Insurance Fund. Let me remind you that initially the initiative to increase the amount of insurance premiums belonged to the Ministry of Health and Social Development, concerned about the budget deficit of the Pension Fund. The Ministry of Finance proposed to raise them from the current 26% to 32%. The Ministry of Economic Development, which is responsible for economic growth, was against it, fearing that business would slow down development under additional fiscal pressure. It seems that the point of view of the Ministry of Finance won, but then the Ministry of Health was indignant, discovering that the mandatory insurance payments do not provide for payments on medical insurance that provide free services to the population. So another 2% was added to the planned figure.
Plugging holes
Increasing the tax burden will cause a wide variety of consequences. The profitability of a business will decrease (especially significantly in more advanced industries, where the share of wages is traditionally higher), this will make our economy less attractive to investors, which means it will slow down its development. Employers will shift part of the additional social payments onto the shoulders of employees, reducing their earnings. That will weaken incentives for labor activity. Meanwhile, according to all forecasts, in 5-7 years the shortage of labor will become the most acute macroeconomic issue for Russia and the main brake on GDP growth.
Will the budget gain much from the rate hike? According to our calculations, the collection of social taxes will increase by 1.1-1.2% of GDP (550-600 billion rubles). But the gain for the budgetary system as a whole will be much smaller - only 0.7% of GDP (approximately 400 billion rubles). This estimate takes into account that part of the salary will go "into the shadows", they will no longer pay taxes on it. In addition, the increase in social contributions will reduce the amount of profits and payroll, which serve as the basis for other taxes. As a result, income tax and income tax collections will decrease, most of which goes to regional and municipal budgets. They will lose, according to our calculations, approximately 0.4% of GDP. So not only businesses and employees, but also local budgets will be the losers.
retirement dead end
Of course, after pensions were sharply increased in 2010, the government had no choice but to increase social contributions. Actually, initially it was assumed that the increase will take place already in 2010, only the crisis forced to postpone the "enforcement" of this decision for a year. But how justified was the next reform of the pension system?
Of course, the level of our pensions is very low. But on the other hand, the Russian pension system is uniquely wasteful. For example, we now have 31 million people of retirement age, while there are more than 39 million recipients of pensions! Only some underdeveloped African countries have such a low retirement age as ours, and I do not know of a country where one could receive a salary and a full pension at the same time without restrictions. So we have reserves to increase pensions through a more rational social policy. We took the easier path of increasing pensions by raising the social tax rate and transferring part of the funds from the federal budget to the Pension Fund.
At the same time, we have not come close to solving the long-term problems of the pension system. In the future, the number of pensioners per employee will grow in our country, which means that the ratio between the average salary and pension will fall again. If real reforms are not carried out, then the need to increase social contributions will arise again and again. Therefore, I believe that the current increase in pensions was a purely populist step: we got rid of today's problem, only exacerbating tomorrow's.
Trend change
Recall that throughout almost the entire 2000s, the government clearly demonstrated its determination to reduce the fiscal burden. With the possible exception of taxes in the oil and gas sector, which were periodically raised, everything else either remained stable or changed downward. And on the example of the rate of insurance premiums, we see a deviation from this rule. At the same time, the authorities do not say whether this is a one-time retreat in tax policy or the beginning of a new trend. Since the government does not explain how it will solve long-term pension problems, there is a reasonable assumption that the tax burden will have to be increased even more. And now the possibility of increasing export duties on metals and chemical products is being discussed. The consequence of this will be the deterioration of the investment climate in the country. And I think this negative result is much more painful for the economy than a simple increase in insurance premiums by 6 or even 8%.