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Moderator: Will the low level of personal income tax compared
to other countries have an impact on our budget?
Yavlinsky: No. We have a choice between other things. If all
our citizens paid 50 percent, as in the Netherlands, 13 percent
instead of 50 percent would have a considerable affect. However,
most of our citizens do not pay anything at all, let alone 13
[percent]. It is better to have 13 per cent than nothing. That
is the size of things.
Moderator: Previously the situation was very difficult, as people
found very inventive ways of escaping taxes. I think that this
continues today.
Yavlinsky: Of course, some people will conceal income and avoid
[paying taxes]. This situation has always existed throughout the
world. However, we should adopt such a rate, so that we should
not be ashamed to tell someone to "pay 13 per cent and feel
safe ". However, I think that it would be even better if
the government allowed for personal income deductions if an individual
has to pay a doctor or pay for his children's education. Do you
know what this would drive us to do? It would be very interesting.
For example, you come and say "last year I earned so much
money, but I had to pay for the medical treatment of my parents
and I paid so and spent so much money on this issue. Here is the
receipt." And this amount would be deducted from the taxes
you had to pay.
Moderator: I can imagine now how many fake receipts would appear.
Grigory Alexeevich, can you imagine that? Everyone would come
up with a receipt, showing that they had been paying for the medical
treatment of their parents.
Yavlinsky: This would not happen. This receipt would serve as
the grounds for a tax inspector to come to see a doctor and tax
him for the money you paid him. This is called "coming out
of the shadows", so that you would not pay for everything,
but people taking money from you would have to pay. This might
include medicine, education, the bare necessities. However, this
should not include such medical cases where an individual would
like to have golden teeth as a fashion accessory.
Moderator: (Laughing) Then I would look great!
Yavlinsky: Indeed. Simply this should not cover such cases: this
should concern only important essential things, especially for
old people We believe that it is important that the economy emerges
from the black market and is legalised. The more legal enterprises
we have, the more people would begin paying taxes, the lower the
rates of these taxes could be and the better our lives would be.
Moderator: In your opinion why are people in our country so afraid
to speak openly about their incomes, not only to the tax inspectorate,
but also to a neighbour or someone else? Why are they so afraid?
Why is it better to hide? Why it is better to make it secret and
illegal?
Yavlinsky: I have often read and heard that our people are envious.
But I don't think like that. I think that things can be explained
as follows. Far from everybody enjoys equal opportunities: some
people have an opportunity to earn money, whereas other do not.
The state simply does not allow them to earn, or they don't enjoy
such conditions. And then individuals unable to earn money become
very jealous of earners. If we could create equal starting conditions
for all of them - simply the same starting conditions, the onus
would be on them to earn the money - but the starting conditions
should be equal, and we would have less such cases then.
Moderator: I think this may happen, because as a rule people
do not earn large amounts of money honestly. How do you pay taxes
on stolen cars?
Yavlinsky: I think this is really dishonest - all the things
connected with drugs, arms and the slavery trade. Such things
are really "black businesses" and are still very strong.
All the other issue are debatable. If you sew beautiful clothes
or make good pies, or are good at mending cars, then you bring
[public] benefit. And the state should establish a rate of 5-10
percent for people who create goods for the public's welfare.
Moderator: ...And calmly make pies...
Yavlinsky: And calmly make pies, sew clothes and make useful
things.
Moderator: My final question is not connected with taxes, although
they could be included indirectly... What do you think of the
work of PR people, i.e. the people who display the work of the
tax service, for example... Simply recollect, ten or even five
years ago - who could hear of this? The word "taxes"
was obscure to everyone, not only schoolchildren and students.
Now everyone knows about this issue, everyone comes out of the
shadow and everyone knows that we have a low rate of personal
income tax. Do you think that such work is really necessary?
Yavlinsky: Yes it certainly is. Such work is needed to help people
gain a better understanding, because there is a reverse side of
taxes. You want the police to do good work, you want to have good
roads. You pay taxes and you don't want the army to be simply
a motley gathering of individuals: you want an army that can really
defend you. You pay taxes and you want the Federal Security Service
to be able to save you from explosions. This is the other side.
Moderator: And when I pay I am sure that they also owe me something..
Yavlinsky: Yes. And if you pay for this, and you are always mocked,
you would not want to pay even 13 percent. That is why the PR
people, as you call them, should not only place advertisements
on the need to pay taxes should be paid, but also explain to the
people what is actually being done with their tax payments, for
example, to run the municipal economy. They should be informed
that the bureaucrats live on their taxes. Then when these bureaucrats
write to say that you may come to see them only once a month from
6 a.m. to 8 a.m. to register somewhere, adding that they are "busy"
all the other time, they should be reminded that their survival
is dependent on your taxes. This is the main issue.
Moderator: I shall remember this.
Yavlinsky: Please do.
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