MOSCOW, August 25 (RIA Novosti) - Russian Economic Development Minister Alexei Ulyukayev has opposed possible tax increases to balance the state budget, calling it the most undesirable scenario for the country at the moment, he wrote in an article in business daily Vedomosti.
"Firstly, the level of taxation is the most important part of the social contract between the state and society. At the beginning of a new political cycle, it was announced that tax burden would not be increased. Three months ago, this decision was confirmed in the "Main Directions of Tax Policy for 2015 and the Planning Period of 2016-2017," and now this commitment has been disavowed," Ulyukayev said.
In addition, the level of the budget’s response to the tax increases may be significantly lower than expected, which will not solve the problem of balancing the budget, but will have a depressing effect on economic activity of businesses and, as a result, it may lead to an actual reduction in tax revenues, the minister noted.
Ulyukayev also said that tax increases should not be among the solutions used to address the state of the Russian economy, which is now balancing between stagnation and recession.
