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Which regions will suffer from the abolition of personal income tax?

Which regions will suffer from the abolition of personal income tax?

  Analysts of ACRA rating agency have calculated which countries will suffer the most when the tax on personal income in Russia is canceled, Forbes reports. According to the analysis, the abolition of personal income tax will most likely affect the republics of Ingushetia, Chechnya and Dagestan.

     On January 13, LDPR deputies made a proposal to exempt citizens with incomes of less than two minimum wages from personal income tax payments. Also, since December of the last year, this idea has been actively discussed in the presidential administration.

     Agency representatives noted that personal income tax is one of the main sources of income for some regions and municipalities. In total, from 2015 to 2018, these contributions accounted for 34% of regional incomes and about 50% of municipalities profit. If citizens are exempted from personal income tax, regions and municipalities will lose funding in the amount of about 300 billion rubles.

     Most low-wage regions will be affected. According to the Federal State Statistics Service, as of April 2019, more than 40% of citizens received a salary of less than two minimum values. In the North Caucasus republics, the number of such citizens exceeded 50%. In the future, the Republic of Ingushetia will lose 18% of its revenues, Chechnya – 17%, Dagestan – 15%. The list of regions that may lose more than 10% of previous income includes Kabardino-Balkaria, North Ossetia, Altai, Ivanovo, Pskov regions and others.

     Densely populated regions with low salaries will also suffer heavy losses. Among them, the Krasnodar territory and the Rostov region are at risk. According to preliminary estimates, their losses will amount to about 10 billion rubles. Moscow and Moscow region due to the dense population will not receive about 9 billion rubles.

     Ilya Tsypkin, an analyst of the agency, noted that the state is in a hurry with the abolition of personal income tax. In his opinion, a mechanism for replenishing the federal budget should be worked out thoroughly.

     For the first time, the head of VTB Andrey Kostin at the Moscow Financial Forum came up with the idea of ​​canceling personal income tax. His idea was supported by Maxim Oreshkin, head of the Ministry of Economic Development, and Valentina Matvienko, representative of the Federation Council.

     In an interview with TASS, Vladimir Putin confirmed that the administration is actively working to resolve the issue. He sees the solution to the situation in in population income level increase.


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