Komsomolskaya Pravda: "We cannot take this burden away from businesses and put it on citizens"
Prime Minister Vladimir Putin has urged ministers to avoid simple straightforward solutions and criticised the Finance Ministry’s proposal to sharply raise alcohol and tobacco excise tax.
The Cabinet of Ministers discussed at a government presidium meeting on Thursday possible ways to cut the insurance premium that businesses have to pay for their employees. Earlier, President Dmitry Medvedev had instructed the government to draft proposals on cutting the premium from 2012 by June 1.
“We had to increase social charges to finance Russia's pension system due to the significant increase in pensions last year,” Putin said. “These charges were increased in view of the healthcare modernisation that we are starting this year – we will discuss it later – that entails purchasing new equipment, overhauling facilities and raising salaries for medical staff.”
He also reminded the ministers about the planned wage increases for law enforcement agencies, above all the Interior Ministry, as well as military service pay and the new state defence order.
According to the prime minister, depending on the government’s decisions, the cut in the insurance premium could create a shortfall of between 400 and 800 billion roubles. These funds could have helped balance out the budget or resolve other issues and challenges facing the government. However, at the same time, businesses are also going through a hard time with the social payments that have been raised. Therefore, the government’s task is by no means simple.
The prime minister criticised the Finance Ministry’s proposal to sharply raise the excise tax on alcohol and tobacco products. This initiative was recently voiced by Finance Minister Alexei Kudrin and Deputy Minister Sergei Shatalov.
Analysts have promptly calculated that the rise would send the cheapest half-litre vodka bottle to 400 roubles, and a pack of cigarettes to an average of 200 roubles.
Putin reminded the audience that he is highly opposed to growing alcohol abuse in Russia and noted that it must be addressed. However, he stressed his doubts that simply hiking taxes will eliminate the problem.
“We need to promote healthy lifestyles and develop sports and physical fitness,” he said. “We also need to give greater attention to education and create a culture that encourages people to cultivate healthy lifestyles, above all to divert young people from drinking or smoking. A set of measures will be needed that will require time and money.”
“There are no simple straightforward solutions for this issue,” he emphasised. “We cannot take this burden from businesses and put it on regular citizens.”
He also said that a direct one-time increase in excise taxes will lead, if anything, to an increase in the consumption of homemade vodka and dangerous substitutes.
He asked the Finance and Economic Development ministries to bear in mind that Russia cannot offset a shortfall in revenue exclusively with oil and gas revenues.
“We may have them today, but tomorrow the situation may change,” he said. “We need sustainable sources of revenue.”
Valery Bugayev
