Page 72 - RusRPTDec22

The State Duma adopted a law
Corporate income tax is one of the two most important “own revenues” of regional budgets, along with personal income taxes, which themselves are likely to take a hit next year as an industrial breakdown
On the one hand, the move reflects a concern about federal tax receipts at a time when these too are taking a significant fall
tax receipts
specifying the distribution of fiscal
receipts between the regions and the federal centre in November. In a
further blow to regions’ fiscal autonomy, the legislature extended the period in
which the central government receives a bigger share of corporate income tax
receipts (3% instead of 2% of a total of 20%) than specified in the Tax Code.
This rule was temporarily changed in 2017, and regions expected to return to
the original arrangement in 2025. This will now not be possible before 2031.
, military mobilization,
and tighter profit margins take their toll on employment and salaries.
. But perhaps more
importantly, it further centralizes fiscal receipts and deprives regions of
revenue upwards of 250 billion rubles ($4.1 billion) annually (based on 2021
). As such, it is a further manifestation of a policy that, throughout
the past two decades, aimed to build a highly centralized and vertically
managed fiscal system that leaves as little room as possible for regions to
control their own resources and shape their own policies.
72 RUSSIA Country Report December 2022 www.intellinews.com