06:03 GMT +313 November 2018
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    Sales tax not to replace VAT before 2009

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    MOSCOW, September 28 (RIA Novosti) -- Head of the Russian Presidential Administration's Expert Board told journalists Wednesday on the sidelines of an investment conference in Moscow that the new sales tax instated to replace VAT will not be introduced before 2009.

    "The projections have been made and the text (of the proposal) is ready," Arkady Dvorkovich said, referring to the proposals that will be submitted to the cabinet.

    He said, however, that the final decision "should be made by politicians.

    "I, for one, believe that sales tax is preferable, while the biggest risks are involved in the uncertainties of the transition period," Dvorkovich said.

    VAT and sales tax are variations of turnover tax, but, whereas VAT is collected as a product moves down the line from producer to end consumer, sales tax is a consumption tax that is collected only once, at the point of purchase.

    The current VAT rate in Russia is 18% with a preferential rate of 10% for "socially important" staple goods. Russia used sales tax in 1998-2003, simultaneously with VAT, but it was then abolished.

    Dvorkovich had said earlier that VAT could be replaced with sales tax in March 2005, when the head of the Expert Board addressed the possible abolition of VAT in 2007 with the simultaneous restoration of a 10-15% sales tax.

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