-= JR =-

they just passed last year a flat tax of 13% on personal income. they came from a fairly unique situation because people in Russia devote 100% of their time to figuring out new ways to defy anyone in a position of authority or government, so its pretty hard to convince them suddenly that they need to give a large chunk of their money to the government. especially so when there is so much corruption and the country is bankrupt anyway and in the transition, life suddenly got very expensive.

i think 2 years ago, come tax time only about 5% of the population filed taxes. only now are they just starting to come out of the shadows and file. also people have a habit that companies pay for them and they never really know anything about it because they just get paid in cash. companies cheat by keeping two sets of books and paying people one amount and reporting they pay 10 times less so the employees never knew much about taxes or had to care.

they are still overhauling the entire legal system and tax system. they learned the hard way that repeatedly raising taxes does not necessarily raise revenues to the government as more people just hide their income. taxes were so out of control that many different businesses were subject to 110% or more.

i think that in general, Putin has done a great job in making these changes. People forget that the Russian government is still 1/2 Communist which makes it pretty difficult to reform the economy when each reform measure moves the Communist's in the wrong direction and costs them credibility and power.



Last edited by -= JR =- at Jan 19 2003, 02:31 AM