Where does taxpayer money go? How efficiently are they spent? Why is the volume of corruption comparable to the volume of the country's budget? These and other questions are the topic of the 2nd Congress of the Russian Union of Taxpayers that opens tomorrow. Sergei Shakhrai, Chairman of the Council of the Union, answers questions from RG.
Russian newspaper | Until now, citizens have been offered only one thing: pay and sleep peacefully. Now we are talking about "people's control"?
Sergei Shakhrai | We believe that the payment of taxes is not only the duty of citizens, but also a special form of their participation in government. On the other hand, the state should also be responsible for spending our common property - the state budget. And since we honestly fulfill our duty to pay taxes, we have a constitutional right to know how efficiently the state forms and spends the state budget. Hence the concept of our union - the mutual responsibility of citizens and the state in the formation and management of public financial resources.
Our task is to raise the level of legal consciousness of taxpayers and form a tax culture. All this will eventually lead to the creation of public control over the activities of state authorities in managing state budget funds, a mechanism for public support of state efforts to improve the budgetary and financial sphere and the formation of a unified system of state financial control.
RG | However, you will agree that so far the majority of taxpayers do not see a special relationship between taxes and government spending.
Shakhrai | Unfortunately, you are right. But not only the level of our current well-being, but also the level of the future tax burden depends on how legally and efficiently the state spends budgetary funds. Because every ruble spent illegally falls on the shoulders of the taxpayer. It leaves a certain portion of government spending uncovered and increases the need for taxes. At the same time, when our taxes go to the budget, we cannot always control what happens to them. And it's not even about corruption. Formally, everything may look right. How much is planned - so much spent. The question is what was spent inefficiently, uneconomically, incorrectly.
RG | How do you see your relationship with the authorities?
Shakhrai | We are opponents and helpers. We are all interested in an efficient tax system that would ensure not only revenues to the budget, but also the free development of the economy. The tax system should not restrain entrepreneurial initiative and activity. It should be neutral in relation to the freedom to choose economic activities. We understand that not all taxpayers are responsible for fulfilling their constitutional obligations. There are a lot of tax collection issues that require cardinal solutions. Therefore, we are ready to cooperate in solving these problems, primarily with the tax authorities and financial control authorities.
Only by joint efforts can we work out the only correct solution that equally takes into account the interests of the state and society. Through public control, we intend to help the state in eliminating its redundant and duplicating functions that divert taxpayers' funds, but we will also check how efficiently our funds are spent.
RG | That is, in some way you claim the control powers of the same Accounts Chamber?
Shakhrai | One of the principles of the relationship between civil society and government is control over the use of the public domain, independent of its administrators. Of course, such control is exercised by the Accounts Chamber. After all, it is formed by the parliament and, on behalf of the citizens who elected it, controls the correct spending of taxpayers' funds. But they are also independent of the executive branch and civil society organizations. Some monitor the observance of human rights, others - the observance of the law, say, in the field of intellectual property. And the union - behind the correctness of relations between the state and citizens in the tax sphere.
However, the Accounts Chamber, on behalf of taxpayers, conducts an external, independent financial audit. That is, control over the state, while opposing the executive branch. And in this it is assisted by civil society institutions: the media, the Public Chamber, our union. So it is essentially an informal component of an independent financial audit.
“This is built with taxpayers' money!”, “Officers fatten at our expense!”, “Where do our taxes go?”. Such phrases are often used in political disputes when it comes to the responsibility of the state to its citizens. Only - not in Russia. Our tax collection system is built in such a way that ordinary citizens hardly think about what taxes they pay and what they go for. There are, of course, exceptions, such as taxes on real estate and motor vehicles - you really have to arrange them yourself, but these payments are not (yet) large enough to play a role in political life.
In order to assess the burden of taxes in Russia, we decided, firstly, to figure out how much the state really depends on our payments. And, secondly, imagine what would happen if we did not pay taxes (receiving mediocre medical care and a meager pension in return), but would dispose of this money at our own discretion.
So, what taxes do Russians pay?
Individuals pay taxes on a car, apartment, house, land, and the like. Employed citizens also pay personal income tax (PIT).
Indirectly, the population bears the value-added tax on goods and services, the employer's insurance contributions to off-budget funds, excises on alcohol and tobacco.
How much tax does an employee pay?
Directly - only personal income tax (13% of salary). However, the employee usually does not feel this - the tax is deducted from the salary and transferred to the state by the employer. When a person is asked about his salary, he usually gives the “net” amount - what goes into his bank account or is issued at the cash desk. In fact, his salary is the entire amount, including tax. In the example below, the employee would say that his monthly salary is 87,000 rubles. In fact - 100,000 rubles.
The employer also pays insurance contributions for the employee to the Pension Fund of the Russian Federation (22% of salary before tax), the Federal Compulsory Medical Insurance Fund (5.1%) and the Social Insurance Fund (2.9%). If an employee earns more than a certain amount per year, then insurance premiums to the Pension Fund are reduced to 10%, and to the FSS they are reset to zero.
What would your income be if you didn't pay taxes?
An employee with a monthly pre-tax salary of 100 thousand rubles costs his employer almost 1.5 million rubles a year: 1 million rubles of this goes to the employee, and almost 0.5 million rubles to the state. In the hands of a person from this example receives 87 thousand rubles a month. If we imagine that there are no state medicine and pensions, and also if there were no income tax, then the employee from our example would receive 125 thousand rubles a month and theoretically could spend 25,000 rubles. on your health and/or save for old age.
The dream of a tax-free world also has its limits. If social contributions are canceled overnight, it is unlikely that most people will save for the future - rather, they would prefer to spend money here and now. This will lead to a jump in demand for goods and services throughout the country - and, consequently, will drive up their prices. That is, the growth of real welfare may be insignificant.
How much do we work for the state?
You can look at taxes and contributions from a different angle - as additional time spent at work to pay them. For salaries less than 60 thousand rubles (“on hand”), to which “discounts” for the payment of social contributions do not apply, this is 33% of working time. That is, every working day out of 8 hours spent at the factory, in the office or at the counter, a conventional Russian works one hour and 21 minutes for the Pension Fund, 48 minutes for regional and local authorities, and another half an hour for compulsory medical insurance and social insurance funds. About 80 working days accumulate in a year, which are spent on paying taxes and contributions.
For people with high salaries, the share of income given to the state will be lower, but still remain significant: the ratio of mandatory payments to the total expenses of the employer decreases from 33% to 25% only for salaries of 600 thousand rubles a month and above.
Where do direct and indirect taxes on individuals go?
Revenues from VAT go to the budget of the Russian Federation. 85% of personal income tax goes to the budget of the subject of the federation, the rest - to local budgets. The regions also receive a transport tax. Excises are divided between the federal and regional budgets: in particular, the center gets excise taxes on tobacco, and the regions get most of the excise taxes on alcohol. Land tax and personal property tax go to municipalities.
Insurance contributions for pensions, medicine and social insurance go to the respective funds. From this money, the PFR pays pensions to pensioners, the FFOMS pays for medical services to those who apply to public hospitals and clinics, and the FSS pays benefits for temporary disability, pregnancy, childbirth and child care. Considering that the Pension Fund is running with a large deficit, which has to be compensated from the federal budget, we can say that not only the contributions of working Russians, but also other federal taxes, actually go to pay pensions.
How much does the budget depend on taxes?
Very much. In 2015, taxes, together with insurance premiums, accounted for 79% of revenues and 71% of expenditures of budgets of all levels, as well as extra-budgetary funds. The contribution of the personal income tax, however, is more modest - about 10% of total income over the past year. This will not be enough for education, health care, or defense - except for the maintenance of security and the work of law enforcement agencies.
Such a comparison, however, is very conditional, since personal income tax goes to the budgets of the subjects, and not to the federal budget. That is, 13% of the salary goes not so much to tanks and missiles (although indirectly to them too), but to such things as schools and roads.
Georgy NEYASKIN
Infographics and a table for the article can be viewed.
In many countries, people have the opportunity to influence the layout of the state budget. And what about Belarus? KYKY asks Vladimir Kovalikn from the Kosht Urada website about this, and then tries to find out from the Ministry of Taxes and Duties where the specific income tax on foreign transfers levied according to Decree No. 24 goes.
Street art on the cover: LEVALET
The expenditure part of the Belarusian budget for 2015 is 141 trillion rubles. At the exchange rate as of December 30, the day the budget was signed, it is $11.9 billion. At the current exchange rate, something like $8 billion. We would like the state to spend this money on road repairs, building parking lots and playgrounds in the yards , salaries for teachers and doctors, assistance to orphans and the elderly. And, of course, some part of the state budget goes to these needs. But the roads still remain broken, there are not enough playgrounds, and the average salary of medical workers is one of the lowest in the country.
Can we somehow influence the fact that some items of the expenditure side of the budget have been increased, while others have disappeared from it altogether? KYKY asked this question to Vladimir Kovalkin, the head of the Kosht Urada website, which analyzes the budget. It has a special calculator that helps Belarusians understand how much they pay to the state.
About this theme: The story of a demolition. How to make officials hear peopleIn addition, you can have fun during your lunch break in the "Propose your state budget" section.
“It is very difficult for a person who is not prepared in economic terms to understand the issue of planning income and expenditures of the state budget. Especially if it concerns our state, - says Vladimir Kovalkin. - In a civilized country, it is good manners to prepare and publish the following documents: Pre-Budget Statement, Executive Budget Continuation, Approved Budget, Current Report, Mid-Year Review, Annual Report and Audit Report. There is also a special version called the Citizens Budget, a light version for citizens to help understand what is going on. Of all this list of documents, we publish only the approved budget and the annual report.”
Indeed, in many European countries all the documents listed by Vladimir are published. Thus, people have the opportunity to influence budget planning. Do Belarusians have such an opportunity? “From the point of view of the Constitution, citizens should have access to information about the finances of the state. On the other hand, the Ministry of Finance does not publish the reports I have listed. All these documents remain for official use. From which it follows: the Belarusian cannot influence the budget planning in any way. He does not see the procedure for coordinating documents. How does it go? The project is prepared by the Ministry of Finance, then it coordinates it with other ministries. After that, this budget agreed with everyone goes to the parliament, where it is again discussed, approved and submitted for signature to the president. A Belarusian is simply not given access to information at the stage of budget planning, completely excluding him from this procedure,” Vladimir explains.
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How budget planning works in other countries
“In developed countries, citizens can influence budget planning through the deputies they actually elect. That is, a person can come to his deputy and make a proposal. This proposal will definitely be considered and probably accepted,” says Vladimir Kovalkin. Belarusians also have the opportunity to call their deputies and offer something. But hardly many people remember the names of these people. And even if a Belarusian gets through to the deputy, ignorance of the full system of planning budget expenditures is unlikely to allow him to offer something sensible.
Is it possible in principle to find out what the state spends Belarusians' taxes on? Amounts by sectors and ministries approved for the whole year can be found in Annexes 3 and 4 to the Law "On the Republican Budget". On the website of the Ministry of Finance in the "Budget Policy" section, reports on budget execution appear every month. The Kosht Urada website also monitors how the budget is spent. Information is taken from the Ministry of Finance and from the Social Protection Fund for the Protection of the Population. But it is almost impossible to find out exactly what the money was spent on. Unless you can go to the site icetrade.by and follow the government procurement. For example, almost 70 million was spent on a personal computer for the Operational Analytical Center. The purchase of paper for office equipment by the National Bank cost the country 507,629,826 rubles, a car for OAO BelEnergoSnabKomplekt was purchased for 936 million, office furniture for Pinsk Forestry cost 24,783,942 rubles, and the purchase of blankets for Polotsk State University cost 59,793 216 rubles. But the most interesting thing is to read about the amounts spent on executive class cars for the chairmen of district executive committees.
Finding out where a particular income tax goes
Since 2003, Decree No. 24 “On the receipt and use of foreign gratuitous aid” has been in force in Belarus. If within a month an amount exceeding 500 base units is transferred to your name from abroad ( 1 base unit today is 180 thousand rubles - approx. KYKY), you are obliged to provide full information to the Ministry of Taxes and Duties: who and why sent you this money.
About this theme: Ten Tips on How to Build Relationships with the Authorities if You Want to Change Your CityIf the finances were transferred by relatives, you will be released in peace. But if the funds were credited to the account from a person who has nothing to do with your life, you are required to pay income tax in the amount of 13% of the amount received in your account.
Last year, income tax was 12%. Another 1% was added to provide maternity capital to families in which a third child appears. But a separate fund for crediting this percentage has not appeared, says Vladimir Kovalkin. The extra money still ends up in the general budget of the country - this is another touch on the question of whether it is possible to trace where specific taxes go.
“Girl, all funds go to the budget. We cannot provide you with information on exactly how your money will be distributed, ”An employee of the contact center of the Ministry of Taxes and Duties answered a KYKY question about what income tax from gratuitous foreign aid is spent on.
Thus, the Belarusian simply has to pay the state. And it is sacred to believe that his taxes will go to good deeds.
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Not so long ago we had a conversation with friends about taxation. One of them recently arrived from Europe, and we carried out a comparative characteristic. To the general shame, we are poorly guided by these figures, so we decided to find out in more detail where and what taxes go to, how they are calculated, and whether there are changes in the 2019 budget.
Before discussing the topic of where and what our “hard-earned” money is spent on, let’s clarify how much taxes are actually paid in 2019, and what they are.
The Tax Inspectorate closely monitors that companies pay taxes on time and in full. If this does not happen, then a fine is provided (for example, for understating income of 20% of the unpaid amount in accordance with Article 123 of the Tax Code of the Russian Federation).
Income tax
- Personal income tax is calculated by the employer from the employee's salary on a monthly basis. For this reason, everyone receives an amount in their hands that is less than the one that was negotiated when signing the employment contract.
- In 2019, the tax calculation remained the same as in the previous year, 2018.
- It is simply calculated. If an employee has the right to a deduction, for example, for children, then it is deducted from the salary, and then multiplied by the tax figure.
- in 2019, 13% - income tax (personal income tax) is assigned for residents, highly qualified specialists who work in the Russian Federation under a patent and for foreigners from the EAEU.
- 30% - income tax for non-residents.
What other contributions are paid
Absolutely all companies and employers are required to pay insurance premiums to the Federal Tax Service, the tariff of which is established by Art. 426 - 429 NK. They are also calculated from payments accrued to employees, and also to those who work under civil law contracts.
- The total contribution is 30%.
- Some companies pay lower insurance premiums if required by law.
- There are no changes in 2019, and many companies and entrepreneurs are deprived of benefits.
- The FSS also lists insurance premiums against industrial accidents and occupational diseases. There are no changes this year.
- Payments are due no later than the 15th of each month.
It was decided not to introduce a luxury tax in 2019 (only amendments - if there is a car with a capacity of more than 410 horsepower, then additional funds will be charged).
Additional (indirect) taxes
- VAT - value added tax is paid by all companies that produce some goods or provide any services. The final price for an ordinary buyer already includes this fee, which is 7% for foodstuffs, 9% for non-food products, 50% for vodka and more than 25% for gasoline.
- Land, transport and property taxes are paid to the Federal Tax Service once a year.
- Since 2019, 3 more have been introduced - environmental, tourist and tax on self-employed citizens.
According to PricewaterhouseCoopers, a Russian on average paid 47.4% (data for 2016) to the state, and a more accurate amount was withdrawn at Moscow State University - 48%. That is, half of the income is given to the state. Where is it spent?
Where and for what do taxes go in the state
Personal income tax remains in the same region where the employee works, that is, where the employer is officially registered. Of the total amount, 85% of the income tax under their departments is received by the regional authorities, and only 15% remains in place and is distributed for needs.
According to the law, this money should be spent on repairs, building roads and maintaining them in good condition, repairing schools, housing and communal services, fire safety, and public order.
Pension, Social Funds and Medical Insurance are organized like this: all funds are collected in one place, and from there they are distributed to pensions, social benefits and medical care.
All VAT goes to the federal budget. Funds are distributed by the government (an annual budget is prepared) for the following sectors:
- police;
- maintenance of the state apparatus;
- army;
- education;
- science and other important industries for the entire state.
Taxes are needed in order for the state to be able to realize social goals, which include the quality of life of citizens, health, education and welfare.
When we give part of our income to the budget, we take part in creating a favorable life. Essentially, we invest in roads, education, national security, and poverty programs.
Federal budget in 2019
The state budget is the main economic document (draft) that is adopted by the government of the Russian Federation to present the course of economic development for the coming year. It consists of several parts - open and closed.
Considering the open part of the budget, we can see the structure of spending on various areas of citizens' lives. And it is not difficult to analyze whether the level of salaries, pensions and the general social level will improve or worsen.
- $63.4 is the price per barrel of oil (Urals brand).
- RUB 63.9 — the cost is 1 US$.
- 4.3% is the inflation rate.
- 19.948 trillion rub. part of the budget is profitable. This year it is more by 4.766 trillion. rubles than in 2018.
- 18.063 trillion rub. - expenditure part. Compared to last year, it is almost 1.5 trillion more. rub.
- 1.885 trillion rub. - surplus, which is 1.8% of GDP. Also, 2011 was in surplus. Then all the years were in deficit.
- 1.3% growth for 2019. Justified mainly by taxes levied, including an increase in VAT from 18% to 20%.
- 3 trillion rub. go to secret expenses and highly secret in the general budget.
- 35.1 billion will be allocated for science.
- 12.6 billion - for culture.
- 512 billion rubles - allocated to improve the demographic situation (population growth, increase in life expectancy).
- 70 billion - assistance to cancer patients.
- For 1 liter of gasoline - about 50 rubles.
- More than 65% is directed to the National Defense (closed part).
- 11280 rub. federal MRO.
- 453026 - maternity capital, which will not be indexed, as in 2018.
The Ministry of Finance warns that high volatility of the Russian financial market is expected. This is due to new US sanctions against Russia, as well as fluctuations in foreign markets.
The budget deficit in the regions will be 0.1%, and federal subsidies will be reduced.
Public debt continues to grow and will increase from 16.209 trillion rubles (15.3% of GDP) to 18.138 trillion (16.4% of GDP). At the same time, the amount of subsidies for equalizing budgetary security will increase.
Why is there not enough money for social payments and so on?
The picture as a whole is as follows: about 80% of the regions receive more federal money than they give to the budget. There are reasons.
- Weak development of business, decline in social production.
- Although the trend is improving more in 2019, the Federal Tax Service is aggressively planning to fight tax evading fly-by-night companies.
- The budget is absolutely dependent on the oil and gas industry, which has already given (the only) higher income in 2019 by 18.9%. You can add one more main source of income for Russia - customs duties. Together they make up half of the federal budget, the rest is VAT.
- Increased defense spending.
- The growth of the "shadow" sector of the economy.
The regions are given a subsidy to equalize the budget, but it does not cover the costs, and the public debt is growing. The lion's share of it (70%) is the debt of commercial structures. And the debts to the state budget are getting harder and harder to repay every year.
Conclusion
- Plans for 2019 and beyond are ambitious. Financing in the amount of 1.7 trillion. rub. is aimed at improving the lives of citizens and bringing Russia into the top 5 economies of the world. It is planned to reduce the level of poverty several times.
- The development of 13 national projects is also a priority, the main goal of which is to equalize social security, improve living standards, and increase demographic indicators.
- A significant role is assigned to the acceleration of technological development and the introduction of digital technologies.
The closer to the date of October 1 - the time of payment of property and land tax - the more often we think about the questions: why do I pay taxes and where do they go? Lidiya Mirzasaliyeva, Head of the Department of Tax Audit of Legal Entities of the Al-Farabi Tax Department of the city of Shymkent, will help us figure this out.
- Lidia Abdulazovna, what kind of taxes exist and who invented them?
– There are several types of taxes: individual income tax, corporate income tax, value added tax, excises, taxes on subsoil users, social tax, land tax, vehicle tax, property tax, fees, duties, other payments. Taxes in their modern form were invented in the 18th century by the Scottish economist Adam Smith, a classic of the theory of taxation. In his work "Studies on the Nature and Cause of the Wealth of Nations", he outlined 5 basic principles of taxation that remain relevant to this day - this is mandatory, unity, justice, certainty and publicity.
– What taxes is an ordinary working person, say, a teacher or a nurse, obliged to pay today?
– Every month, the accounting department of an enterprise or institution withholds 10% of income tax and another 11% of social tax from the employee’s salary (of which 6% is paid by the employer, 5% by the social insurance fund), you also deduct 10% of the salary to the pension fund every month, but I will make a reservation - this is not a tax, but your savings, which you can use in the future. Once a year you have to pay property tax, land tax, who owns a car - transport tax.
“People are interested in where their taxes go.
- Taxes from individuals, as a rule, go to the local budget. That is, we work with the population on three types of taxes - on property, land, transport (who has it). In the indicators of the criteria for evaluating the activities of the tax authorities, there is also an indicator of the completeness of tax revenues to the local budget.
All deducted, paid taxes go to the state budget - the state cash desk, from where they are then distributed for various needs: for the maintenance of state institutions - schools, kindergartens, hospitals, law enforcement agencies; ensuring the security of the state - the maintenance of the army; financing of state programs, subsidizing, granting subsidies and loans; maintenance of the state administration apparatus (payment of salaries to civil servants); construction and improvement of social facilities and territories; pensions and so on.
- And what types of taxes should be paid by a person, say, trading in the market? The so-called self-employed person, individual entrepreneur (IP)?
– There are three possibilities here. First: if an individual entrepreneur works under a patent, then he must pay a tax in the amount of 2% of the estimated income. The second option: if an individual entrepreneur works according to a simplified tax payment scheme, then he pays 3% of the total income. The third option: payment of tax by individual entrepreneurs according to the generally established regime - taxation from 10% of profits. Profit is the amount of income minus the amount of expenses. Plus, the ones mentioned above are the tax on property, land and cars. All these taxes also go to the local budget. Taxes for environmental pollution go to the local budget, but this applies to legal entities.
- Since the beginning of this year, one-time coupons for those trading in the markets have been cancelled. Has this had any effect on the collection of payments?
- Thank God no. I think this is the result of a large explanatory work carried out among traders in the markets.
- But, you see, there are cases when an individual entrepreneur working, say, under a patent, as well as legal entities, can underestimate the amount of their estimated income? How then to be?
- In this regard, we, the tax authorities, are helped by cameral control. The purpose of an in-house audit is to provide the taxpayer with the right to independently eliminate violations identified by the tax authorities based on the results of an in-house audit. This concept means identifying the undeclared amount of value added tax (VAT) and corporate income tax (CIT) and other types of taxes. In case of detection of violations based on the results of an in-house audit, a notice is issued on the elimination of violations, a tax notice is issued to the taxpayer stating that he has an additional source of taxes. That is, be kind, declare and pay the tax within 30 working days! If this does not help, then we have the right to apply tax administration measures.
- Recently, at an expanded meeting with the participation of heads of regional departments, the tax authorities of the region reported on the implementation of the budget. And the results of the first half of the year are very good: the state budget plan was executed by 104.3%, with the plan of 100,706.5 million tenge, 105,009.9 million tenge was actually received. With a local budget plan of 31,766.7 million tenge, 35,061.4 million tenge were actually received. It was stated that only in the first half of this year, additional reserves in the amount of 10.5 billion tenge were identified and collected. What does "additional reserves" mean?
- Additional - means collected in excess of the planned. I will explain exaggeratedly using the land tax as an example. Tax officials compare the data of the authorized bodies with the actually registered taxpayers and the amount of their payment of land tax. For property tax, we compare data not only with the BTI, but also with data on real estate purchase and sale transactions made in the current year. This is the so-called property income. As you know, when making a transaction, a 10% tax on the increase in the value of real estate is paid. For transport tax - we compare the MAI data with our own. If a difference is found, we look for the missing quantity.
- Here, it turns out, what are your tasks, employees of the tax authorities ... Remind me, the functions of the tax service.
– Fiscal, regulatory, stimulating, redistributive and control. Any adult, knowing the directions of spending budget funds, should understand the importance and necessity of paying taxes. Timely and sufficient tax revenues can ensure the security, financial stability and independence of the state. Simply put, for citizens, a balanced budget means guaranteed social assistance, pensions and confidence in the future. For entrepreneurs, conscientious payment of taxes guarantees state support, loans and, as a result, the prosperity of their business. Everything here is interconnected.
- Thank you for the clarification.
Farida SHARAFUTDINOVA