Russia’s federal budget for 2018-2020 adopted

 Russia’s federal budget for 2018-2020 adopted

Russia’s State Duma has passed the bill on federal budget for 2018 and the planned period of 2019-2020 in its third reading. 

According to the bill, Russia’s budget revenues will amount to 15.26 trillion rubles ($256 bln) in 2018, 15.55 trillion rubles ($260 bln) in 2019, and 16.3 trillion rubles ($273 bln) in 2020.

Expenditures are planned at 16.53 trillion rubles ($277 bln) in 2018, 16.4 trillion rubles ($275 bln) in 2019, and 17.15 trillion rubles ($287 bln) in 2020. Federal budget deficit will total 1.3 trillion rubles ($21.8 bln) in 2018, 819.1 bln rubles ($13.7 bln) in 2019, and 870 bln rubles ($14.5 bln) in 2020.

The bill also envisions a transition to the new budget rule, TASS reported.

Starting 2018, additional oil and gas revenues received from the price of Urals crude oil above the base of $40 per barrel in 2017 prices, will be allocated on reserves instead of expenditures.

The base price will be adjusted by 2% annually starting 2018.

The vice-rector of the Academy of Labour and Social Relations Alexander Safonov, speaking to a correspondent of Vestnik Kavkaza, noted that if real incomes of the population decrease for a long period of time, the continuation of this trend would be a wrong step. "We need to support the population's income in every way - this is normal economic policy," he said.

"The additional funds spent by the state on wages to state employees, military, and security forces will have a positive impact on the purchasing power of the population. All economists say that further economic growth is possible only if the population's consumer demand is increased," Alexander Safonov stressed.

According to the vice-rector of the Academy of Labour and Social Relations, the growth of non-oil revenues by 1 trillion rubles in three years can be achieved through tax collection.

"The so-called tax maneuver, according to which the Ministry of Finance wants to rise in the value-added tax, is also discussed. But it would not be a good desision, because an increase in VAT will not increase budget revenues, it will rather cause a drop in consumption. In general, I think that the government's sources for increasing non-oil revenues are related to improving the quality of tax base management, legalization of incomes, on the one hand, and on the other hand, to the potential ability of the Ministry of Finance to change the distribution of taxes and focus on VAT," Aleksandr Safonov concluded.

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