Russian Finance Ministry proposes leveling taxes on deposits, shares, bonds

Russia's Finance Ministry is drafting proposals to level out taxation of personal interest income on bank deposits, shares and bonds, Finance Minister Anton Siluanov said at a financial forum held by business daily Vedomosti.

"Right now bank deposits are not subject to taxation if the interest rate is not higher than the refinancing rate plus 5 percentage points; for interest on bonds taxation is general. We need to level out taxation of deposits, shares and bonds," Siluanov said.

He said there are currently various conditions in place in regard to interest on bank deposits, bonds and on the sale of securities.

"The Finance Ministry faces the challenge of evening out conditions for investors in terms of the fairness of taxation. We are now preparing proposals on how to do this," Siluanov said.

Siluanov said that there is an issue of how to pinpoint the parameters of taxation in which "the rich get richer and people with low incomes will be subject to taxation."

"We think that we need to set some bar or threshold beyond which taxation is not envisaged. If a person - we're talking about a private individual, an income tax - receives up to 1 million rubles a year from a deposits or interest on shares or bonds, we suppose that this issue will be discussed more, but he shouldn't be taxed. If it's more than 1 million rubles, that is already a major investor who is fully capable of paying taxes," Siluanov said.

Later, Siluanov told journalists that the Finance Ministry is mulling over applying a special taxation procedure that already acts in relation to deposits to interest income on shares and bonds as well.

"We want to use about the same for interest income received from owning shares and bonds, as well," he said. Together with this, for all these income categories there are plans to establish an upper threshold at which income will be subject to a general procedure.

This mechanism will make taxation of wealthy and low-income citizens fairer.

"With such a mechanism we will precisely be able to impose additional taxes on the wealthy category of citizens who have large deposits and high interest payments on them. Not everyone can get 1 million rubles a year in the form of interest income from a deposit or securities - there should be an enormous deposit or enormous securities ownership," Siluanov said.

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