Press Release, 6.12.2017

“Regional leaders should initiate the State Council of Russia to change the system of distribution of fiscal revenues”, Grigory Yavlinsky, candidate for presidency in Russia, said during his visit to Tatarstan.

During his meeting with journalists in Kazan, he told about his initiative The New Budget Policy, which evisages distribution of tax revenues in equal proportion per 33% for the federal centre, regions and municipalities. At present Tatarstan send 54% of its tax revenues to Moscow, 38.8% remain in the republic and only 7% remain in municipalities.

According to Yavlinsky, it is very important to achieve equal distribution of tax revenues, as a significant part of expenditures, including those in the social sphere, is attributed to the regional and the municipal level without any state funding.

Grigory Yavlinsky is certain, that such directives as Vladimir Putin’s 2012 “May Decrees” can not change the situation, on the contrary – “regions get into debt and the social sphere is being destroyed“. To illustrate it, he cited official statistical data: during the past five years the number of doctors in Tatarstan fell by 2%, the number of hospital beds shrunk by 11%, the number of kindergartens dropped by 6%, the number of schools fell by 25.5%, and 10% of schoolchildren in the republic study in the second shift.

In addition, Yavlinsky proposed specific changes in distribution of revenues from some taxes and excise duties. Thus, he proposed that most of the profit tax of organisations (60%) should remain in the municipalities, 30% in the regions, and only 10% should go to the federal centre. At present municipalities have nothing left, because 85% of the taxes are sent to the regional level, and the remaining 15% are sent to the federal centre.

Nowadays 100% of the value-added tax (VAT) are sent to federal center. Grigory Yavlinsky proposes to distribute VAT of large business between the center and regions as half-and-half, medium business – in the ratio of 33% (center), 34% (regions) and 33% (municipalities), and small business – 0% – 33% – 67% respectively.

Two thirds of income tax are proposed to be left in municipalities (67%), one third – in regions. Nowadays the regions have 85% of income tax, and municipalities only 15%.

Now the severance tax completely goes to the federal centre. Grigory Yavlinsky proposes in his programme to leave one forth of this mineral extraction tax in the regions.

Yabloko candidate also proposes to divide excise duties in an equal proportion among the federal centre, the regions and the municipalities. At present the federal center gets 50% of excise duties for alcohol and strong alcoholic beverages, 100% of excise duties for tobacco, automobiles and motocycles, 12% of excises for gasoline, diesel fuel and engine oils. Nowadays regions get 50% of excises for strong alcoholic beverages, all excises for laps and 88% of excises for gasoline, diesel fuel and engine oils. Municipalities get nothing at present.

At the press-conference Grigory Yavlinsky drew attention of regional leaders to the fact, that “if you will not discuss it now, then after the presidential elections no one will listen to you“. “Unless I become President,” he added.

The State Council is an advisory body under the President which includes leaders of all the Russian Federation subjects (regions), speakers of upper and lower chambers of the parliament, and also leaders of the State Duma factions.