President Putin is believed to be planning the creation of a budget of nearly ₽10 trillion (US$16 billion) to develop a new healthcare system and infrastructure in Russia.
Most of the spending is scheduled to take place after 2020, which according to Bloomberg, will lead to the authorities cutting expenditure in other areas and looking for additional sources of income. In particular, there are plans to raise taxes, including a new 4% sales tax, although these measures have not yet been approved.
The new decree is part of Putin's pledge to work on "improving the living standards of citizens, ensuring the sustainable growth of their real incomes, increasing the level of pensions above the inflation rate and halving the level of poverty in the country". In addition, new national goals are to be devised in areas such as education, health, housing, roads and small businesses.
Tatyana Golikova, chief of the Accounting Chamber, noted that, in order to achieve these goals, the Russian economy would need to grow by 4% a year. "The programmes that we have today do not embrace the resources of the regions," she said.
The authorities have not yet revealed where they expect to find the money to finance the new decree, although some costs should be covered by reducing expenditure in areas such as defence or redistributing budget funds.
Conducting a tax manoeuvre for the entire economy for 2019-2020 could also increase budget revenues by almost ₽450 billion (US$7.2 billion). Another possible source of income would be to raise the state retirement age, which could save 0.1-0.2% of GDP by 2050.
Vasily Koltashov, head of the Centre for Economic Studies of the Institute of Globalisation and Social Movements, told Pravda: "If we talk about tax reforms, then we do not have a progressive tax. There are very large taxes on salaries - Russians pay 13% of this tax. Plus, there are a lot of fiscal deductions that make poor people even poorer.”
As a result, he believed it was “reasonable” to take some money from the defence budget. “The state needs to pay more attention to social needs and send positive signals to the private sector," Koltashov said.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
President Putin is believed to be planning the creation of a budget of nearly ₽10 trillion (US$16 billion) to develop a new healthcare system and infrastructure in Russia.
Most of the spending is scheduled to take place after 2020, which according to Bloomberg, will lead to the authorities cutting expenditure in other areas and looking for additional sources of income. In particular, there are plans to raise taxes, including a new 4% sales tax, although these measures have not yet been approved.
The new decree is part of Putin's pledge to work on "improving the living standards of citizens, ensuring the sustainable growth of their real incomes, increasing the level of pensions above the inflation rate and halving the level of poverty in the country". In addition, new national goals are to be devised in areas such as education, health, housing, roads and small businesses.
Tatyana Golikova, chief of the Accounting Chamber, noted that, in order to achieve these goals, the Russian economy would need to grow by 4% a year. "The programmes that we have today do not embrace the resources of the regions," she said.
The authorities have not yet revealed where they expect to find the money to finance the new decree, although some costs should be covered by reducing expenditure in areas such as defence or redistributing budget funds.
Conducting a tax manoeuvre for the entire economy for 2019-2020 could also increase budget revenues by almost ₽450 billion (US$7.2 billion). Another possible source of income would be to raise the state retirement age, which could save 0.1-0.2% of GDP by 2050.
Vasily Koltashov, head of the Centre for Economic Studies of the Institute of Globalisation and Social Movements, told Pravda: "If we talk about tax reforms, then we do not have a progressive tax. There are very large taxes on salaries - Russians pay 13% of this tax. Plus, there are a lot of fiscal deductions that make poor people even poorer.”
As a result, he believed it was “reasonable” to take some money from the defence budget. “The state needs to pay more attention to social needs and send positive signals to the private sector," Koltashov said.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
