9 Feb 2012 13:14

Insurance tax returns fall short of expectations - Siluanov

MOSCOW. Feb 9 (Interfax) - Russian insurance tax returns grew just 1 percentage point of GDP last year, despite these going up, Finance Minister Anton Siluanov said at the Russian Union of Industrialists and Entrepreneurs (RUIE) Congress.

"Despite the increase ion insurance contributions, returns from those contributions rose by just a percentage point of GDP," Siluanov said.

Far higher returns were expected in view of the increase in the insurance tax rate from 26% to 34%, he said.

"Despite the increase, we fell short of the volume we expected on the one hand, and on the other hand, Russia's regions had an income tax shortfall, and that is one of the key taxes for municipalities," Siluanov said.

"The sort of maneuvering that raised insurance contributions does not always bear fruit because we see a reduction in income tax and growth in insurance taxes and if you look at things on average then this did not have the sort of impact that it should have had."

Siluanov also said the 34% insurance tax rate did not necessarily have to be extended beyond 2014.

"I think we should consider not extending insurance tax from the current level so as not to increase payroll pressure," he said.

"All budgets stipulate insurance tax of 34% from 2014. That's a lot, of course," he said.

It will be fairly difficult to get around not raising contributions because this will result "in the current situation in a more unbalanced budget," Siluanov said.

But the only way out is to tweak the existing insurance contributions systems, primarily the pension system and, as a result, reducing the transfer from the federal budget to the Pension Fund."