According to RBK data, the tax authorities are primarily interested in residents of Moscow. This is a city where nearly 10% of Russia’s population lives and which accounts for almost 30% of all personal income tax (PIT) revenues.
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Interested in apartments and cars bought by the unemployed
According to RBK sources, the Federal Tax Service is asking to clarify the sources of income of those who purchase real estate and vehicles. Citizens invited to the tax authorities are questioned not only about the origin of funds but also about property rentals.
The need for budget funds in Russia is becoming increasingly acute: the tax service and the Ministry of Finance “fail to meet their own tax collection plans,” notes Aleksandra Prokopenko, a research associate at the analytical center “Carnegie Russia Eurasia Centre.” In the first half of this year, the federal treasury recorded a deficit of 5.7 trillion rubles (69 billion euros) – 1.6 times more than planned for the entire year.
Increase in “gray” settlements
Moreover, banks are recording a sharp increase in “gray” settlements in business and a record cash outflow: according to the Central Bank of Russia, since the beginning of the year, cash in circulation has increased by 2 trillion rubles (21.8 billion euros) – twice as much as in the entire previous year.
By the end of the year, the Russian banking system may lose 3.8 trillion rubles (41.38 billion euros) due to cash outflow, predicts Taras Skvortsov, Deputy Chairman of the Board of Sberbank. If this forecast is confirmed, the increase in cash circulation will become a record in history and exceed the pandemic peak of 2020 (2.8 trillion rubles) and the first years of the war (2.3 trillion rubles), writes The Moscow Times.
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According to T. Skvortsov, banks also record a sharp decrease in cash returned for collection – this indicates that businesses increasingly use cash to pay salaries and settle transactions with counterparties.
“The gray turnover is growing… this is more typical for small and medium-sized businesses; in the case of large businesses, such a situation is almost unnoticeable. Therefore, the main reason here – as we believe – is the increase in the tax burden; adaptation has not yet occurred,” says T. Skvortsov.
“It is clear that people cannot and do not want to pay more, so they use various optimization schemes, close down, and so on,” explains A. Prokopenko. Therefore, the Federal Tax Service has actively targeted both small and medium entrepreneurs and individuals, and the digitalization that has taken place in recent years apparently allows analyzing transaction data, says the analyst.
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