Sergey Pyatenko, FBK Partner, took part in the panel discussion of progressive taxation

In the press center of the “Parliamentary Newspaper” a round-table discussion of “The introduction of a progressive tax schedule: legislative aspect” was held for the relevant legislative draft to be introduced to the State Duma. In the discussion took part Oleg Nilov, the author of the document and Transport Committee member, Dmitry Ushakov, a Committee on Budget and Tax member, and the invited experts. FBK was represented by Sergey Pyatenko, FBK Economic and Law School general director.

The discussion touched upon resources of reforming the tax system in Russia, its openness and transparency, how to create conditions for effective economic growth.

Sergey Pyatenko believes that the introduction of a progressive scale of taxation will have a negative impact on Russian economy. “The tax burden on business is exorbitant already. It is “disguised”. In particular, employees do not notice large deductions on the labor remuneration funds. Roughly speaking, to pay an employee 100 roubles the employer has to give about 50 roubles to the state. That is why any raise in taxation will have, at least, to be combined with the reduction of such payments,” FBK Partner is convinced. He also pointed out that any further increase of tax burden might blow up the development incentives, lead to business collapse or transfer to other jurisdictions. The economic growth can only be achieved through the reduction of tax burden, so even from the point of view of the Government, no tax growth should be proposed.

FBK Economic and Law School Director noted that the budget problems are far-fetched and connected with the excessive liberality of the state in relation to the own expenses. The income growth in the budgetary sphere has already brought about the situation when salaries of the public sector employees already exceed the average salaries in many regions. It has boiled down to a paradox – those who live on the taxpayer funds live better than the taxpayers.

Summing up, Sergey Pyatenko said that Russia should not be compared with the economically developed countries in terms of taxation schedule. “We are somewhere between the fiftieth and the sixtieth places by the level of our economic development. It is somewhat like Mexico and Brazil. In order for us to rise in the scale we need the economic growth, which cannot be achieved by means of tax increase”, resumed the expert.