30 Jul 2018 11:37

Federation Council approves bill raising VAT

MOSCOW. July 30 (Interfax) - The Federation Council on Saturday approved a bill raising VAT from 18% to 20% from January 1, 2019.

The VAT increase will generate an additional 620 billion rubles in budget revenue a year, according to the financial and economic justification attached to the bill.

The document also sets the premium rate for compulsory pension insurance at 22% (up to the established limit) and 10% (above the limit).

The law currently envisages a regressive scale of pension insurance premiums. The tariff for calculating premiums depends on citizens' wages. If a citizen's wage is below 85,000 rubles a year, the tariff is 22%, and if it is higher, the excess amount is subject to a 10% rate. The tariff was expected to increase to 26% and 10%, respectively, from January 1, 2021.

The law will come into effect on January 1, 2019.