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    Russian Economy General News: #2

    sepheronx
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    Post  sepheronx on Wed Jul 09, 2014 5:17 pm

    Russia, Belarus, Kazakhstan parliaments to synchronize Eurasian Treaty ratification
    MOSCOW, July 09. /ITAR-TASS/. The parliaments of Russia, Belarus and Kazakhstan will synchronize the process of ratifying the Eurasian Economic Union Treaty, Speaker of Russia’s upper house of parliament Valentina Matviyenko said on Wednesday.
    “We have agreed on synchronizing the fulfillment of intra-state procedures and ratifying this most important historic document,” the speaker said.

    Outsiders not to be accepted to BRICS reserve pool
    MOSCOW, July 09. /ITAR-TASS/. BRICS leaders will sign a framework agreement to establish a pool of reserve currencies at the upcoming summit in the Brazilian resort city Fortaleza on July 15-16, Russian Finance Minister Anton Siluanov told journalists.
    I agree. At first at least it should be entitled only to BRICS nations. As well, I like the Idea that it it held in either India or China due to pressure on Russia politically from west.

    Japanese company to operate LNG Arctic Ocean route from Russia to Europe, East Asia
    TOKYO, July 09./ITAR-TASS/. Major Japanese shipping company Mitsui O.S.K. Lines decided to be the first in the world to launch a route of round-the-year regular supplies in the Arctic Ocean. This project will be launched starting from 2018, Mitsui’s Tokyo head office told ITAR-TASS on Wednesday.
    This is good. At least Japan is being coherent in trade. Big deal this is and will probably help push further deals like the proposed pipeline from Shakalin to Japan.
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    Post  Austin on Wed Jul 09, 2014 6:14 pm

    Nuland: USA ready to impose more sanctions on Russia very soon

    http://en.itar-tass.com/world/739754
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    Post  sepheronx on Wed Jul 09, 2014 6:19 pm

    Austin wrote:Nuland: USA ready to impose more sanctions on Russia very soon

    http://en.itar-tass.com/world/739754

    Let them. Regardless what Russia does, they are gonna throw sanctions at Russia. Like a mp.net member said that they are throwing a hissy fit because Russia isnt helping them achieve their goal. Since trade between Russia and US is so low, guess it wont do much. Oh, except hurt oligarches like Phokorov and his multibillion rouble basketball stadium in NYC or someones flat in LA.

    Maybe US is secretly helping Russia deal with its oligarchy problem and Putin can save face? So many other conspiricy theories being thrown out their.
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    Post  magnumcromagnon on Thu Jul 10, 2014 5:07 am

    sepheronx wrote:
    Austin wrote:Nuland: USA ready to impose more sanctions on Russia very soon

    http://en.itar-tass.com/world/739754

    Let them. Regardless what Russia does, they are gonna throw sanctions at Russia. Like a mp.net member said that they are throwing a hissy fit because Russia isnt helping them achieve their goal. Since trade between Russia and US is so low, guess it wont do much. Oh, except hurt oligarches like Phokorov and his multibillion rouble basketball stadium in NYC or someones flat in LA.

    Maybe US is secretly helping Russia deal with its oligarchy problem and Putin can save face? So many other conspiricy theories being thrown out their.

    I think the issue isn't trade between Russia and the U.S. but trade between Russia and Europe, and once you become apart of NATO it's an agreement to allow and make your military intelligence agencies taken over and subservient to foreign powers such as the U.S. The true problem for Russia is that Russia has always been a historically an Asian country, but refuses to recognize that as so in return that Russian territory has been disproportional developed, and well-developed Western Russia, and a under-developed Eastern Russia, which has a multiplying affect that has made Russia's economy much smaller than it should of been. An Eastern and Central Russia that's as developed as Western Russia would see the Russian economy grow 2x, 3x, or 5x it's size now, but because Russians preferred to develop it's Western sphere more than it's Eastern sphere of influence the Russian people are now paying the price economically regardless of sanctions and bad blood with the West, the lost income alone for not moving Eastward economically and the fact it took 10 years to get the natural gas deal done was a monumental geo-strategic mistake on behalf of Eurasia, and after centuries of Russophobia from the West it's like Russian political leadership are just now understanding they should move towards the East!
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    Post  Austin on Thu Jul 10, 2014 5:48 am

    I agree the current Economic Problem stems from the fact that Russian Leadership had mostly ignored its economic relations with East be it the every growing China or India or other SE countries.

    They kept sucking to the west thinking things will be fine and dandy for them in la la land.

    Now with West showing its true colours Russian Leadership has been caught sucking their thumb and running to China for gas deal , making BRIC work and what not.

    I think sanction will be good for russia in the long run , making leadership make decisive changes in Economic Model and integrating with more fast growing economic leadership.

    If they dont sanction Russia then I am afraid Russian leadership will go back sucking up to the west , thats the path to least resistance.
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    Post  sepheronx on Thu Jul 10, 2014 6:49 am

    Going east is what everyone is doing. Russia has the land to thank for its position. But I agree, the Russian leadership has shown cold shoulder to its future benefactors. Truly, Moscow should be left on its own and the capital moved. Some people would say it is dumb, but it is where the money will drive and go, and Moscow can handle itself as just another major Russian city without being the centerfold of the Russian country as a whole.

    Siberia, as beautiful and wonderful it is, got its bad name due to misinformation about it always being cold (when it clearly is not) and that it is all where slave labor camps are (I have a friend at work who studied and worked in 1986 soviet Russia, and worked in Siberia in construction, and really loved it at the time. Left in the early 90's when things went to shit. He is from Bolivia). Anyway, they are now going to scramble to develop Russia central and far east because that is where it will all be for now on.
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    Post  Austin on Thu Jul 10, 2014 9:39 am

    EU sanctions on Russia could push gas prices up 50% - World Bank


    Russia and the EU would both suffer if sanctions escalate, energy markets the most, according to a World Bank report. The loss of the European market would cut Russian government revenue by 10 percent of GDP, and European gas prices would jump 50 percent.'

    Most dependent EU countries could see higher gas prices. Countries from Central and South East Europe like Germany, Italy, Hungary, and Poland are up to 80 percent dependent on Russian gas imports, says the World Bank.

    Increased tension between Russia and the EU is a key downside risk to regional forecasts.

    Should tensions further escalate, more intrusive sanctions, possibly interrupting trade and banking flows, cannot be ruled out,” the World Bank report said. “Given the close economic interdependence between the EU and Russia, the escalation of sanctions would likely impose large economic costs, damaging recoveries in both.” In Russia, oil revenues represent 9 percent of GDP and a quarter of government revenues, and “a loss of EU export markets could reduce government revenues by 10 or more percent of GDP,” according to World Bank analytics.

    Europe depends on Russia for nearly 30 percent of its natural gas supplies. In case of supply disruption or sanctions, the economic costs could be high. Additional LNG imports to Europe from elsewhere in the world would boost global demand and prices.

    However even assuming no boost to LNG prices, EU import costs would rise by 50 percent or about 0.15 percent of GDP says the report. The losses would be much higher for major importers.

    Russian economic growth in 2014 is expected to be at 0.5 percent. The longer outlook forecast is a bit more optimistic with 1.5 percent in 2015 and 2.2 percent in 2016.

    Global GDP growth is projected to gradually rise from 2.4 percent in 2013 to 2.8 percent in 2014, 3.4 percent in 2015 and 3.5 percent in 2016.
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    Post  Viktor on Thu Jul 10, 2014 5:48 pm

    Almost 20bin$ surplus - could it be beause of more efficient taxation?


    The surplus of the federal budget for the first half amounted to 649.3 billion rubles


    Excellent !

    Deputy Head of Industry and Trade: Russia plans to increase exports of machinery and equipment by 6% annually
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    Post  Austin on Thu Jul 10, 2014 7:20 pm

    The Finance Ministry: sectoral sanctions will slow GDP growth by 0.2-0.3 percentage points of the Russian Federation

    http://ria.ru/economy/20140710/1015439632.html

    "In the short and medium term, Russia has enough reserves to compensate for most of the potential economic losses associated with the sanctions," - said the Ministry of Finance of Russia

    MOSCOW, July 10 - RIA Novosti. Imposition of sanctions against the entire sectors of Russia's economy may slow GDP growth by 0.2-0.3 percentage points in 2014, but Russia has sufficient reserves to compensate for most of the losses in the medium term, according to the Ministry of Finance of the Russian Federation .


     Following a referendum in the Crimea, during which inhabitants of the peninsula voted for its entry into Russia, the U.S. and the EU imposed sanctions against the citizens of this West RF.Pri warned that does not renounce the possibility of imposing sanctions on industries of the Russian economy in the event of an escalation of the crisis in Ukraine .


    "In the short and medium term, Russia has enough reserves to compensate for most of the potential economic losses associated with the sanctions, while the escalation of tensions can reduce GDP growth to 0.2-0.3% in 2014," - said in a main directions of fiscal policy for 2015-2017 years, published on the MOF website.  Economic Development predicts that the economy will grow this year by 0.5%.


    "In the longer term sanctions could have a significant impact on reducing the fiscal sustainability, as well as deteriorating conditions and reduce opportunities for modernization under the restriction of imports of technology, investment and best practices" - officials believe.


    The document notes that the scenario of social and economic development of the Russian Federation, which formed the basis for budget planning, involves a relatively stable environment in which large-scale economic sanctions against Russia are not applied, and allows foreign tensions easing in the second half of 2014 and the resumption of growth in investment fixed assets.


    "Imposing sanctions on certain sectors of the Russian economy may lead to a deterioration of their financial condition, borrowing conditions, increase in risk premiums and increased capital outflows. This may lead to a further weakening of the exchange rate, higher inflation and a deterioration in consumer confidence," - said the Ministry of Finance.


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    Post  Austin on Thu Jul 10, 2014 7:28 pm

    Foreign debt fell for the I half-year by 1.1%, to $ 720.9 billion
    07/10/2014 17:57   11 Feb. 1314


    Country's external debt fell from beginning of the year $ 7.9 billion, or 1.1%.  In annual terms, foreign debt rose by $ 13.2 billion, or 1.9%.




    MOSCOW, July 10 - RIA Novosti. External Debt of the Russian Federation on July 1, 2014 amounted to 720.926 billion compared to $ 728.859 billion as of January 1, 2014, according to preliminary data of the Bank of Russia.


    Thus, the country's external debt has decreased since the beginning of the year to $ 7.9 billion, or 1.1%.  In annual terms, foreign debt rose by $ 13.2 billion, or 1.9%.


    Of the total debt on the state governing bodies have to 54.638 billion dollars, CB - 16.04 billion.  The lion's share of the debt accounts for banks (206.531 billion) and other sectors (443.716 billion).


    For the second quarter foreign debt increased by 0.7%, or $ 5.1 billion (from 715.819 billion).
    At the same time the Central Bank revised estimates of debt on January 1 and April 1 of this year.  Earlier regulator estimated external debt at the beginning of the year to 727.062 billion dollars, and in the first quarter - to 723.8 billion dollars.
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    Post  Austin on Fri Jul 11, 2014 2:24 pm

    Makes a very good read on reality of EU Energy Dependency

    Russia’s Grip Over EU Energy Unlikely to Change Soon
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    Post  Viktor on Fri Jul 11, 2014 8:59 pm

    Austin wrote:Makes a very good read on reality of EU Energy Dependency

    Russia’s Grip Over EU Energy Unlikely to Change Soon

    EU is afraid that by 2030 its energy dependance on Russia might by 80%. EU countries including Norway are decreasing oil and gas and coal production big time because they

    are running out ot them on fast track. On the other hand green energy (wind and solar) failed so far big time.
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    Post  Hannibal Barca on Fri Jul 11, 2014 9:04 pm

    By 2030 there will be no EU my friend. Take this for granted  Cool 
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    Post  Viktor on Fri Jul 11, 2014 9:09 pm

    Hannibal Barca wrote:By 2030 there will be no EU my friend. Take this for granted  Cool 

    Certainly hope so !
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    Post  sepheronx on Sun Jul 13, 2014 3:42 pm

    Russia, Cuba sign package of cooperation documents in energy sector

    HAVANA, July 12 /ITAR-TASS/. Russia and Cuba have signed a package of cooperation documents. The signing ceremony was held on Friday in the presence of Russian President Vladimir Putin and his Cuban counterpart Raul Castro after their talks.

    Russia ratifies Cuba debt write-off of $35 billion
    The documents included a bilateral statement on non-placement of weapons in outer space and an intergovernmental agreement on cooperation in the area of international information security.
    Apart from that, the sides signed a number of memorandums, including a memorandum of cooperation between the two countries’ ministries of culture; a memorandum of cooperation between the two countries’ ministries of industry and trade; a memorandum of cooperation between the two countries’ ministries of health in the area of protection of men’s health; a memorandum on the development of a special centre for training fire fighters and rescuers.

    They need to come up with other things to invest in other than just oil and gas. Oil and gas is fine and dandy, but where can Cuba actually sell it? And at the same time, there is Venezuela with their over abundance as well. Eventually, some other commodity has to be created in order to up your economy.

    Crimea to have four industrial parks
    YEKATERINBURG, July 12, /ITAR-TASS/. Russia plans to organise in Crimea four industrial parks, where investments will be about five billion roubles (about 148 million dollars), Deputy Minister of Industry and Trade Georgy Kalmanov said on the sidelines of the Innoprom industrial exhibition on Saturday.
    “The peninsula will have industrial parks, most probably four: three in the Republic of Crimea and one in the federal city of Sevastopol. The investments will make about five billion roubles. The money will be used for organisation of necessary facilities of the industrial parks, to where we shall attract investors,” he said.

    Industrial parks are always good. Even if it is mostly in logistics and storage, as well as low key industrial like local mills and distilleries, these usually bring in a lot of cash.

    Russia’s AvtoVAZ to raise car parts localization to 90%
    YEKATERINBURG, July 10. /ITAR-TASS/. Russian car manufacturer AvtoVAZ will raise the level of localization to 90% of all produced car components from 84%, CEO Bo Andersson told reporters on Thursday.
    “The general localization is 84% for the whole LADA model range. Localization for LADA Largus amounts to 51%, for Chevrolet Niva stands at 95% and for Kalina amounts to 85%,” Andersson said.

    This is good. Always good to localize production. More jobs for people and more money for state.

    Rosneft closes deal to buy Pirelli shares
    MOSCOW, July 11. /ITAR-TASS/. Rosneft, a leading Russian oil company, has closed a deal to purchase a 50% share in capital of Camfin S.p.A., a holding company, owning 26.19% of the Pirelli & C. S.p.A. Company, press service of the Russian oil company reports on Friday.
    The Russian company has bought the share from an international consortium of Unicredit Bank, Intesa Bank and Clessidra Fund. Rosneft paid 12 euro per every share of Pirelli & C. S.p.A.

    Not bad. It is good that a oil and gas giant is getting into the commodity business. Cant just sell raw materials. In this case, they are looking at making oil based byproducts. In this case, quality tires of Italian make is a good start as they usually have the big business. Now onto other products like plastics and such. Get rid of the concept of being a 1 product company and become multiproduct!
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    Post  Austin on Mon Jul 14, 2014 7:26 am


    Russian government prepares plan on cutting expenditures – Finance Minister


    Russia's government has prepared proposals on cutting the expenditures and is considering ways to increase revenues. However, the citizens and businesses will have to finance the state’s increased obligations, Russian Finance Minister Anton Siluanov said in an interview to the Vedomosti newspaper."All countries that face budget difficulties take one and the same steps: cut the expenditures, increase the number of revenue sources, including at the expense of property sale," the minister said, reports ITAR-TASS.






    "We have developed high expenditure growth rate, first of all by means of increasing wages to the public sector employees and defense spending that increases annually," Siluanov said. "A considerable amount of funds is spent on ensuring the Pension Fund balance. The pension reform is not over, the volume of subsidies and grants-in-aid of the Russian Pension Fund in 2015 will be some three trillion rubles with the total federal budget volume of 15 trillion rubles."

    Siluanov recalled that initially it had been planned to make the pension system self-sufficient, and in the current state it is deficit-plagued. "In these conditions we have prepared proposals on cutting the expenditures, this is the main task: the constant increase in expenditure obligations cannot continue forever, it is necessary to stop and begin the work to improve efficiency of budgetary allocations," he said.

    "We also consider a second option," the finance minister stressed, "possibilities for increasing revenues. First, increase in taxes and duties, including by means of better administration. We have the value-added tax (VAT) collection rate of 94%, we set the task to increase it to 98% within the next three years. Second, it has been proposed to equalize the taxation of revenues from dividends and wages."

    "Increasing the tax on dividends, by the way, is not our idea," the finance minister said. "It has been borrowed from the MPs who talk of justice in taxation: why public sector employees, low-paid citizens pay a 13-percent income tax, and businessmen who get the main revenue from investment instruments - just 9%? Some other tax innovations that make the budget system more balanced have also been proposed."

    "Assuming considerable expenditure obligations such as the armaments program, increasing pension payments, we will have to take uneasy and unpopular decisions. This time has come. When we considered the 2015 - 2017 draft budgets, we paid our attention to the fact that at the time when all these costly decisions had been made we had entirely different forecasts of the (economy) growth tempos and revenues to the treasury. We don't have these revenues. But we have assumed the expenditures, which must be financed," Siluanov said.

    In his view, "the sense in expenditure restraint is that we as a country dependent on oil and natural gas should not take the risk of external influences," because "the oil price does not depend on us, it's a factor that is formed under the influence of many causes. It is necessary to prevent the investment rating downgrading, otherwise foreign investors will leave Russia," Siluanov stressed that increasing expenditures "is a road to nowhere with unpredictable economic and financial consequences".

    "We have reached the limit of expenditures, because we are practically not replenishing the reserve fund anymore. In 2015 we plan to add to it some 430 billion rubles, but this may not happen," he said.

    Answering the Vedomosti question whether, in the view of the Finance Ministry, the full tax amnesty for offshore capitals is expedient, the finance minister said in conclusion: "We should grant amnesty for those revenues that may appear as a result of the transfer of funds from offshore jurisdictions to Russian jurisdiction. That is, additional taxation of income should not take place during money transfer. In general, we don't talk of the transfer of all resources to Russian jurisdiction. If a company works in an offshore jurisdiction, so let it stay there, but pay taxes here under our legislation. There is no such idea that all offshore companies should be closed and businesses must transfer money to Russia. It is just necessary to pay taxes honestly.



    Read more: http://voiceofrussia.com/news/2014_07_14/Russian-government-prepares-plan-on-cutting-expenditures-Finance-Minister-9090/
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    Post  Austin on Mon Jul 14, 2014 7:28 am

    Looks like diffcult days , months and years ahead for Russian Economy.

    With the 3rd round of sanctions likely to come with US Pressure on Europe , Things will get more difficult for Russian Economy specially when it comes to Investment and Supporting the Rouble which will greatly diminish the forex
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    Post  sepheronx on Mon Jul 14, 2014 7:33 am

    Austin wrote:Looks like diffcult days , months and years ahead for Russian Economy.

    With the 3rd round of sanctions likely to come with US Pressure on Europe , Things will get more difficult for Russian Economy specially when it comes to Investment and Supporting the Rouble which will greatly diminish the forex

    Meh. Stock exchange is a joke since it fluctuated in 1 day during the crisis of 2008, which caused the crisis to begin with. Add in the fact that even if it depreciates, they can tie it to something. During the Soviet Union, the Rouble was only traded amongs close members and even then, its value was pretty high (I think it was about 10 roubles per USD back in the 80's). And that was with sanctions up the ying yang. At least the Rouble can be traded amongst other nations. Hopefully, the Russian government will not be stupid about this and do decide to actually trade between Rial and Rouble, to get the ball rolling. When that trade happens, then Iranians can see the opportunity to invest in the rouble since they cannot in nearly any other currency.

    Anyway:

    Russian trade surplus rose in the 1st half of the year by 15% - CBR
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    Post  sepheronx on Mon Jul 14, 2014 7:51 am

    Austin, in your article you posted:

    “We also consider a second option,” the finance minister stressed, “possibilities for increasing revenues. First, increase in taxes and duties, including by means of better administration. We have the value-added tax (VAT) collection rate of 94%, we set the task to increase it to 98% within the next three years. Second, it has been proposed to equalise the taxation of revenues from dividends and wages.”
    “Increasing the tax on dividends, by the way, is not our idea,” the finance minister said. “It has been borrowed from the MPs who talk of justice in taxation: why public sector employees, low-paid citizens pay a 13-percent income tax, and businessmen who get the main revenue from investment instruments - just 9%? Some other tax innovations that make the budget system more balanced have also been proposed.”

    this caught my attention.  VAT Tax is what exactly?  At that, income tax is 13% for citizens and 9% for business?  That is very low.  Lower than Canada.  I am paying around 22% income tax, and we have the same socialized system as Russians do (even if ours is more efficient and modern).  Federal income tax for business is around 15%, and that is not including the provincial tax.

    So it is true, Russians pay less in taxes.  Which is a major killer for federal budget.  Add to the fact that in Canada, most to everyone who owns a home is paying a morgage of average about $200,000 - $300,000 (average home where I am is about $400,000).  So in the end, we are getting screwed here in Canada.

    Then there is this:

    “We have developed high expenditure growth rate, first of all by means of increasing wages to the public sector employees and defence spending that increases annually,” Siluanov said. “A considerable amount of funds is spent on ensuring the Pension Fund balance. The pension reform is not over, the volume of subsidies and grants-in-aid of the RF Pension Fund in 2015 will be some three trillion roubles with the total federal budget volume of 15 trillion roubles.”

    How does the pension fund work in Russia?  Is it that whatever the person puts into the pension, a certain amount is given to the individual?  I know where I am at, we put money into our CPP through our wages every bi-weekly and a certain amount is given to the individuals in terms of tax breaks.  At least that is how I understand it (I could be wrong).  Is this different in Russia?  It is good they are not dipping into the pensions cause in US, the government is dipping into the 401K in order to deal with their economic issues.  Them threatening Russia is just going to spiral the whole thing out of control.

    As well:

    “All countries that face budget difficulties take one and the same steps: cut the expenditures, increase the number of revenue sources, including at the expense of property sale,” the minister said.

    So does this mean that they are going to further push the privatization of state controlled companies?  In doing so, the government can get extra revenue, while the companies themselves will start paying regular taxes without incentives unless it is in a SEZ (Special Economic Zone).  This could increase revenues (as long as the company becomes competitive).

    Edit: Back to VAT

    http://en.wikipedia.org/wiki/Tax_Code_of_Russia#Federal_taxes

    It seems VAT is relatively high. Maybe if they lowered it, for domestic consumption goods but increase it on imported goods, it could create a massive demand for domestic goods from the population. Add in the fact that having a lower VAT will increase consumption, which will help stimulate the economy. I find VAT to be good and bad, but a not very high VAT would benefit more than a higher VAT, because that is what stunts consumption. And consumers are the biggest part of Russian economy. But import VAT is quite low. Why is that? Is this a result from the 90's and that has not been looked at?

    What I can gather from all this, is this is why I can see why Russia's economy, even with all these massive new deals, is not growing but rather is stagnating and thus they need to cut spending. Their tax system is abysmal and as well, business laws are somewhat none existent. They could fix a massive amount of Russia's economy by simplifying tax codes and increasing import taxes while decreasing domestic consumer tax. All the while, get that pension fund sorted out since it sounds like it is a major reason why loss of funds.
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    Post  Austin on Mon Jul 14, 2014 8:43 am

    For as long as the Rouble is pegged against USD/Euro and is a free floating currency i.e freely convertable from Rouble to USD and vice verse , It will be under tremendous pressure against external sanctions specially by EU.

    CBR will have to spend huge amount of USD to prevent from free falling of Rouble.

    If sanctions come against Russia , they should temporarily stop free floating of currency and try to peg the Rouble against  Renminibi/Yuan and Natural Resources if possible. 


    Taxes are flat in Russia to encourage more spending for ordinary people and to attract investement for Businessman.

    Raising taxes in period of sanction will also prevent business from Investing.
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    Post  sepheronx on Mon Jul 14, 2014 2:56 pm

    Austin wrote:For as long as the Rouble is pegged against USD/Euro and is a free floating currency i.e freely convertable from Rouble to USD and vice verse , It will be under tremendous pressure against external sanctions specially by EU.

    CBR will have to spend huge amount of USD to prevent from free falling of Rouble.

    If sanctions come against Russia , they should temporarily stop free floating of currency and try to peg the Rouble against  Renminibi/Yuan and Natural Resources if possible. 


    Taxes are flat in Russia to encourage more spending for ordinary people and to attract investement for Businessman.

    Raising taxes in period of sanction will also prevent business from Investing.

    And it very well should, since pegging ones currency to another, especially one from a country where they are hostile, its better to peg it to something else. Maybe not Yuan, but what about Hong Kong dollars? HKD is pretty high in value and is another currency used in high trading compared to Yuan. As well, why not start investing in HK bonds?

    If they peg the Rouble to oil gas gold or whatever, it will gain temporary growth, but that is good and bad. If the rouble stays lower, then it becomes cheaper to opperatein the country for businesses. To an extent at least. Thank goodness Russia sits on a mountain of resources or it would become more expensive due to having to import.

    As for taxes, it will have to be either raising them to fund the social development, or keep it low like now, but make cutbacks to the social development. In this case, maybe they should introduce a semi private health care system where a certain % of profits from private health care goes into funding public one. As well as privatize other social cares like street cleaning, and such. Because low taxes cannot pay for all these social benefits and then military. Biggest killer of socialist countries federal budget is due to them paying for it. But it comes through the expense of income taxes. Here in Canada, we are having problems even funding the programs we have and are constantly being told we may have to go private on a lot of social benefits, and we are a smaller nation with much higher incomes per person and higher taxes.

    Maybe keep business tax low, but at least not individual. And maybe increase import VAT so it can stimulate domestic growth. It worked for the automotive industry in Russia.
    sepheronx
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    Post  sepheronx on Mon Jul 14, 2014 6:03 pm

    Oh look, another Russian Oligarch with Russian money in London: http://rt.com/news/172552-billionaire-buys-london-house/

    He shouod be stripped of his position.
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    Post  Werewolf on Mon Jul 14, 2014 6:17 pm

    sepheronx wrote:Oh look, another Russian Oligarch with Russian money in London: http://rt.com/news/172552-billionaire-buys-london-house/

    He shouod be stripped of his position.

    Take the money and right into state budget and rise the budget of education,health care and pensioner fond.
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    Post  sepheronx on Mon Jul 14, 2014 6:21 pm

    Or make him pay some sort of excessive tax (obviously he can afford it) for foreign property. And use the tax money to build modern infrastructure and posh communities for any future oligarches who want to blow money on a mansion, can do it in Russia.
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    Post  Werewolf on Mon Jul 14, 2014 6:23 pm

    sepheronx wrote:Or make him pay some sort of excessive tax (obviously he can afford it) for foreign property. And use the tax money to build modern infrastructure and posh communities for any future oligarches who want to blow money on a mansion, can do it in Russia.

    In every country there should be a law, limiting the absolute maximum amount of money that can be "earned" or stacked per person. Everything earned above that limit has to be invested in social sector.

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