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Head of the Federal Tax Service: in Russia, the world’s smallest VAT gap

The tax authorities reduced the VAT tax gap (discrepancy between declared VAT deductions and actually paid tax amounts) to 0.6%. This was announced by the head of the Federal Tax Service of the Russian Federation Mikhail Mishustin.

The head of the Federal Tax Service noted: “Our greatest success in this is in the situation with the value added tax, which is considered the most difficult to collect in the world, although the vast majority of economists believe that this is the fairest and most reasonable way of taxation – it is the value added tax, and not negotiable amounts”.

According to Mikhail Mishustin, the system of control over VAT refunds, which Russia was the first to launch in the world, has become a driver of tax collection in general.

“I will not name the double-digit figures of the VAT tax gap with which we started. We were saddened the first time we downloaded all the invoices into the appropriate system and saw what it was like, this same gap. But now I can already name the figures: the tax gap on VAT in Russia is less than 0.6%. I have not seen lower percent in the world” – the head of the department said.

The head of the Federal Tax Service also noted that the qualitative changes in the administration of VAT have significantly increased the income of this tax to the budget, despite a slight economic growth.

“In particular, VAT revenues increased by 16.7%, or by 498 billion rubles. At the same time, according to our estimates, the increase in the tax rate provided less than half of the increase in revenues and, importantly, did not lead to accelerated inflation” – Kommersant newspaper quoted Mikhail Mishustin as saying.