Transcript of the beginning of the meeting:
Vladimir Putin: Mr Mishustin, I'm listening. What are the results for the first two months?
Mikhail Mishustin: We just got the statistics – and we have a forecast for the first quarter based on the results. I'll tell you specifically about February – according to our data, in February 2012, the federal budget gained 321 billion roubles in revenue, or 20.1% more than in February 2011. So, in February and January the federal budget gained 733 billion roubles, which is 16% more than in January–February of the previous period. And based on these data and what we see in March, we have made estimates for the first quarter. In the first quarter of 2012, according to preliminary estimates, administered revenue to the federal budget will amount to 1.221 trillion roubles, which is 21% higher than in the first quarter of 2011.
Vladimir Putin: That's decent.
Mikhail Mishustin: This has been a steady trend for two years. Revenue has been coming in steadily. You know, we're always watching it very carefully, and I always report to you on how income tax is doing. At the moment, we see that the value added tax (VAT) for the quarter, despite the large amount of express value–added tax, is still equalised and will exceed the corresponding collection period of the first quarter of 2011 by about 5 percent.
We are also seeing a reduction in total debt – it decreased 12 percent for the year. I reported this. And there is a significant reduction in the number of disputes with the tax authorities. Moreover, the burden on the judicial system has decreased over three years – at this point, we can report that the case load has been halved. We have reduced the amount of litigation against both taxpayers and taxation authorities.
I also would like to report on our progress on your instructions regarding the cancellation of debt. We have that data.
Vladimir Putin: The public's liabilities.
Mikhail Mishustin: That's right, personal liabilities. We have completed all the work. I have a slide for you on the interaction between the tax authorities and the public about the calculation of taxes that individuals pay directly. There are 15 departments that supply us with information on addresses, tax bases, the cost of flats and so on.
So now the write-off itself is complete. I can now report that we have written off 31 billion roubles in debt which accumulated in one way or another among more than 31 million citizens. Among these taxes, 62% was transport tax – that amount is 19.3 billion roubles; personal income tax (14%) for 4.4 billion roubles; property tax (12%) for 3.8 billion roubles; land tax (8%) for 2.5 billion roubles; and miscellaneous other cancelled taxes (4%). Since these taxes accumulated, as we have said, over ten years, the public will certainly immediately feel that these mistakes...
Vladimir Putin: Not taxes, liabilities.
Mikhail Mishustin: Of course, liabilities. Tax liabilities – absolutely correct. They accumulated over 10 years, and will also make themselves known in the methods of payment. In fact, we have – we have discussed this at length – provided for a single notification, which will include information on transport, land and property taxes all in one go. And individuals will be able to – in addition to receiving this information – send in a special absentee form, with which they can inform us that something in the information received does not correspond to reality. This could be information about an individual's address, vehicle, flat that does not belong to him by right of ownership, which he may not own or an incorrect value specified with an incorrect address. It is very important that we receive feedback from individuals, so as to encourage people to conveniently and comfortably pay the statutory taxes and fees.
In conclusion, I want to say that we have worked hard in our campaign to expand our electronic services which allow people to pay taxes and be informed about relevant issues related to tax administration. More than 200,000 people to date have paid their property, transport and land tax liabilities online. We hope to rapidly develop this service. Personal taxpayer accounts that provide these services are one of the most popular online tax e–services.
Vladimir Putin: That's wonderful. We need to further expand this type of service – I mean that it should save people time, and they should not have to communicate directly with an administrative agency anymore. And the state actually benefits.
I have another question for you, and this one is related to the VAT refund. You know it's a problem, we’ve discussed this many times. How are things in this area?
Mikhail Mishustin: Mr Putin, first of all, according to last year's statistics – this was discussed many times – very serious steps have been taken to shore up the administration of VAT. In particular, for last year, in summation I can say that the growth of tax in general in the total budget of the Russian Federation was 32%, while growth in direct tax refunds was only 1.5%. This is evidence of significant change; among other things, we're seeing the old tax evasion patterns disappear. As for the further improvement of tax administration, we are at this time working out the appropriate solution. I believe that this year we will be able to present our proposals to the government, which, among other organisations, will be examined by the commission led by Deputy Prime Minister Viktor Zubkov, and will engender a number of changes in tax law, the tax code, methods and procedures of tax administration, which will allow us to effectively solve this problem.
Vladimir Putin: What do you think about proposals to cancel all VAT refunds?
Mikhail Mishustin: I think they should be considered comprehensively. Certainly, you need to look at the lost income amid such proposals – and at how we can ensure that budget spending commitments are covered. Such proposals should be considered. Undoubtedly, all ideas should be reviewed and assessed. From the standpoint of revenue, VAT is a large part of the federal budget. You know that in the consolidated budget, as I've already reported, the bulk is profit tax, but value added and mining taxes are rather serious contributors to the consolidated budget.
Vladimir Putin: Please continue this work together with the Finance Ministry, the Economic Development Ministry, your colleagues and the expert community. We'll have a separate meeting and discuss this question again.