A proposal to reduce VAT on socially important goods in Russia

19.11.2024

Article published on the Izvestia website

Izvestia has learned that a bill to give effect to this proposal will be submitted to the State Duma on 19 November by deputies from the Just Russia – For Truth political party, led by Sergey Mironov.

“The bill proposes reducing VAT on certain types of products that are socially important for a broad range of Russian citizens from 10% to 5%. VAT on these items will be reduced to 0% in the next tax period if the inflation rate for these goods during the previous calendar year is more than the overall inflation level”, reports Izvestia.

The bill states that the taxation system applies to food products, including beef and poultry, meat and meat products, milk and milk products, eggs, vegetable oil, margarine, special purpose fats, sugar, salt, bread and bakery items. Its authors also want to extend the VAT reduction to include children’s goods (knitwear, socks, clothes, children’s beds, prams etc.), as well as medicines, medical products and periodicals.

“Socially important goods such as food and children’s products are vital for Russian citizens and are the first items that people put in their shopping baskets. Rising prices have a major effect on standards of living, especially for those on low incomes. In order to arrest the increase in the cost of these goods, we propose lowering the rate of VAT, and if necessary to reduce it to zero”, Mironov told Izvestia.

Results from a monitoring exercise carried out by the Association of Retail Trade Companies (ARTC) in early October showed that the cost of socially important products fell in retail chains in September, with the cost of “premier price” essential food items having decreased by 1.2%. The fall in prices accelerated nearly threefold compared to the previous month (from -0.41% in August).

According to the ARTC, the main reason for the September trend in prices was a seasonal decline in the cost of borscht vegetables. The price of white cabbages in retail chains fell by 23.75% compared to the previous month, carrots by 21.5%, beetroot by 19%, potatoes by 18% and onions by 10.6%. In addition, the cost of seasonal apples fell by 8.3%, granulated sugar by 4%, broiler chicken carcasses by 3.2%, lamb by 2% and beef by 1.2%.

The most noticeable price increases in September were seen in large retail chains for butter, wheat bread and milk. Rice, vermicelli and millet also rose in price.

Source: https://iz.ru/1792933/2024-11-19/v-rossii-predlagaut-snizit-nds-na-socialno-znacimye-tovary