MOSCOW, March 11 (RIA Novosti) – Almost 300,000 self-employed Russians have quit business in Russia in the past three months due to social tax hikes, an Economics Ministry official said on Monday.
From January 1, 2013, the Russian government doubled the annual fixed-sum social security tax for individual entrepreneurs to 36,000 rubles ($1,200), in a move that directly affected babysitters, housemaids, tutors, handymen and other self-employed Russian workers earning 50,000-100,000 rubles a year.
“The new tariffs that came into force from January 1, 2013 and doubled the taxation base for fixed-rate payments reduced the number of individual entrepreneurs by 293,421 people between December 2012 and February 2013,” said Natalia Larionova, director of the ministry’s department for small-medium enterprise business and competition.
That represents 7 percent of the total number of individual entrepreneurs registered in Russia, she said.
Economics Minister Andrei Belousov said in late February the government’s decision to introduce the tax hike for self-employed entrepreneurs was wrong, and proposed the tax be scrapped.
Russia’s OPORA lobby group, which represents the interests of domestic small and medium businesses, has called for the tax to be reduced, as has Russian business ombudsman Boris Titov, and the All-Russia People’s Front created by then Prime Minister Vladimir Putin in 2011 for elections to the State Duma.