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Russia Is Income Tax Paradise - Self-Employed Pay Flat 4%, Others, Flat 10% (Russian TV News)

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Maybe this is why American politicians hate Russia so much, it makes their tax and spend scam operation look bad.


- Can I pay with a card?

- Yes, of course.

Instead of a bulky cash register — a compact tablet near a payment terminal. In the summer, Anna purchased an online device for her clothing store for 24,000 rubles ($374.5). To compensate, she will get a tax deduction of 18,000 rubles ($280) from the state at year-end. She doesn’t feel sorry for the money spent — it has become faster and easier to work. There are fewer checks and visits to the tax agency now. The device transfers the data itself.

Anna Gubareva, entrepreneur: "Sitting at home at my computer, I see what's going on in my store, my average check. I like it, it's convenient."

We decided to conduct a simple experiment. On our way to work, we buy some coffee.

- What would you like? Cappuccino?

- Yes.

We take the coffee and save the check. Note the place and time — 9:52 a.m. We meet with Mikhail Mishustin, Head of the Federal Tax Service at the information center, where all the operations are shown in real-time.

- We bought some coffee in the morning.

- On purpose?

- Yes, we'd like to test it on ourselves. Look, I bought some cappuccino in the morning…

- Yes, everything's correct here…

- At 9 a.m. on Pravda Street. How do we find my check?

- Each cash register here basically transmits data online to the tax service server, and we can receive information on cash registers at any moment. Tatyana, where did you buy it, here?

- Yes, here. Pravda Street, 8.

- Look, the time will be on the right.

- Here it is. Yes, it's exactly the same.

- Compare them, so there's no deception, Tatyana.

In the same way, you can find your purchase on your smartphone via the Check Verification app.

- Look closely. We simply aim it at your QR code and see the check.

- Here it is, right.

- Yes, and now we press the Verify Check button…

- And "The check is correct."

- Today, we have more than 720,000 checks verified daily.

- Do people verify them?

- Yes.

- So, all I bought today is seen by the tax agency on the same day?

- At the same minute, I'd say.

- Shouldn't I be afraid I'm being watched?

- Surely not. No, you're surely not being watched because we don't bind the data of cash registers that we receive to the person. You saw that we could tell where the check came from only by the time and the cafe's name.

In literally several years, Russia became a leader in advanced technologies of taxation. The world's leading newspapers use our country as an example. Here's the future of tax services. Digital, real-time and without any declarations. In a matter of just 90 seconds, the authorities see each transaction in Russia, from Saint Petersburg to Vladivostok.

A Financial Times columnist was so impressed by Russia's technologies, he dedicated a whole-page article to them. It's called "The Taxman's Digital Dream".

Chris Sanger, Head of International Consulting at Ernst & Young: “Russia is definitely one of the leaders. The ability to analyze and work with VAT daily and even every minute is an incredibly important function, especially for such a big country as Russia.”

140 million natural persons, almost 4.5 million companies, 3.6 million individual entrepreneurs and 11 time zones. One of the largest databases in the world — 705 terabytes of information on our taxes — is processed 24 hours a day by two centers — in Moscow Oblast and near Nizhny Novgorod. On a professional holiday — Tax Inspector Day — the President meets with the head of the service.

Vladimir Putin: “This is an entity, whose results of work build the entire budget, its most significant part, and therefore create the conditions for solving social issues, issues in the fields of defense, security, state-building…”

Mikhail Mishustin, Head of Federal Tax Service: “In ten months of 2019, we received 18.9 trillion rubles ($295.1 bln) in the consolidated budget, which is 7.9% higher than the corresponding period of 2018, and 10.5 trillion rubles ($163.9 bln) in the federal budget, which is approximately 7.1% higher.”

A line through the night, a stampede at the entrance, hopeless chaos inside — the notorious 46th Tax Office in Moscow was stormed by entrepreneurs just several years ago.

“Stampedes, swearing... So for us to pay taxes and re-register everything, we basically have to go through all these circles of hell. That's insane!”

There are no queues today. It's calm here. After entering the TIN, the terminal automatically directs to the necessary window.

“Get a ticket. Child's play!”

Entrepreneur Anastasia Kostyuk has two legal entities. Instead of sending an assistant with documents, she prefers to come to the tax office herself now.

“I have questions regarding tax collection. But the service is good.”

“It used to be noisy here, everyone was fighting.”

“It became faster. Much faster.”

Anna Ilyushina, chief legal officer: "On average, it takes 10-15 minutes from start to finish, considering the time to get a ticket and be invited to a window."

Those who work for themselves don't even need to go to the tax office now. The self-employed have all their accounting in smartphones.

“The first game will be with tables. You need to come up with a name for your table.”

Sergey Mokhov, showman, presenter: "A very simple, intuitive interface which has a big New Sale button. So I touch it and fill in two fields — the name of the organization, with which I conclude a contract, and the cost of my service. At the end of the month, I receive a tax report and pay for everything by card. It's very simple and easy."

Sergey installed the My Tax app as soon as the experiment began. Clients want to work in a civilized way — under a contract and with electronic payments.

Sergey Mokhov: “To be honest, it's easier for me to pay 4% than keep a low profile and sleep with a thought that the tax office will visit me at some point.”

Mikhail Mishustin: “We're showing it for the first time. You can see that as of today, as of November 21, 2019, 284,758 people have registered as taxpayers of personal income tax. And the number of checks issued using this system exceeds 31 million. The total income of all time is more than 32 billion rubles ($499.8 million).”

Starting January 1, 2020, 15 regions will be added to the 4 pioneer regions. And in July, a new tax regime for the self-employed should start working throughout the country. For those who see it exclusively as a big brother, who think they are being watched from every vacuum cleaner and iron, here are some practical tips from the Tax Service. The video was shown at the World Congress on Information Technology.

Richard Quest, CNN anchor: "I assure you that the tax and customs service of Her Majesty the Queen of Great Britain and the US Internal Revenue Service are nowhere near as friendly to users."

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Every fourth Russian receives "letters of happiness" from the tax office in electronic form. Let's clarify — should you wait for a letter or log in to your personal account yourself?

Mikhail Mishustin: “If a person registers his personal online account and then agrees to receive the appropriate tax notice by his personal account in electronic form, they can refuse to receive the paper notice.”

To sleep peacefully, it is better to pay taxes on apartment, car, or vacation home on time — that is, until December 2.

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