25 Nov 2009 15:10

Decision to switch from unified social tax to social payments final

MOSCOW. Nov 25 (Interfax) - The decision to switch from the unified social tax to insurance payments to extra-budgetary funds starting January 1, 2010 is final and will not be reversed, said Russian Prime Minister Vladimir Putin.

"It would be right not to increase the tax burden [on businesses] but the choice has been made," Putin said at the Russian Pension Forum in Moscow on Wednesday.

"We could possibly look for these or those forms of compensation for the increased tax burden," he said.

"We will look at economic development trends and carefully weigh our capabilities. If these capabilities grow in the future, we will make decisions minimizing the consequences for the economy," he said.

In 2010, insurance payments will be at the level of the unified social tax collected in 2009, i.e. 26%, but they will be increased to 34% in 2011, he said.

"The deferment will be granted so as to leave additional resources at businesses' disposal and so to help them overcome the crisis," Putin said.

A privileged rate will be in place until 2015 for certain categories of insurers, including agricultural producers, enterprises belonging to national organizations of the disabled, those engaged in folk arts, and those run by native Nordic ethnic groups, and also for residents of technological innovation economic areas.

The government "understands that the fiscal burden [on businesses] will grow," Putin said. "However, it is impossible to create a balanced and stable pension system without it. You and us, as well as society, had to choose whether the money should be left to businesses or to pensioners. In my view, we have made a Solomonic decision, and there will be no increase in fiscal burden in 2010, and the lost revenues will be financed from the state's resources that were accumulated earlier," Putin said.