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. Last Updated: 07/27/2016

Minister: 13% Flat Tax Will Be Kept for at Least 3 Years

A deputy tax minister has promised that the flat income tax of 13 percent due to come into force on Jan. 1, 2001, will not be changed for three years, the newspaper Vremya Novostei reported Friday.

His statement fuels fears that the lower rate — current rates are between 12 percent and 30 percent — is merely a short-term ruse to draw taxpayers to declare incomes.

Deputy Tax Minister Viktor Zubkov was quoted as saying that the tax rate could change after three years and did not rule out a return to a progressive tax rate in which higher wage earners pay tax at a higher rate.

Zubkov said he was speaking personally as a "human and citizen" and that his is not the official position of the Tax Ministry.

The 13 percent tax rate would draw incomes "out of the shadows" and increase revenue to the state budget, he said.

"Many taxpayers will declare all the income they receive after Jan. 1, 2000," he said.

For this reason, it will be necessary to keep the rate at 13 percent for three, four or five years, he added.

After that, however, the tax rate will have to be changed, he said, suggesting that 13 percent remain the lowest income tax rate and 20 percent the highest.

Nowhere in the world were income-tax rates as low as 13 percent and in some countries the rate is 40 percent, 50 percent or even 60 percent, he said.

Zubkov’s has made similar statements before, and it is not the first time the government’s motivation for introducing the 13 percent flat income tax has been called into question.

Deputy Prime Minister Ilya Klebanov said in July that the tax will increase just after corporations stop hiding their true incomes.

However, the architect of the government’s tax program, of which the flat tax is a part, Economic Development and Trade Minister German Gref, speaking two days after Klebanov, said that a tax hike may take place "in the long-term future," in eight years to 10 years.