Russia to Raise Max Base to Calculate Social Insurance Payments
The Russian government has proposed an increase in the maximum value of the tax base for social insurance and pension payments by 8 percent beginning Jan. 1. All companies in Russia, including foreign and multinational enterprises, are liable for compulsory insurance contributions for their employees to fund social welfare programs. The payments include social insurance in case of employee's temporary incapacity to work or maternity leave, medical insurance to fund the free public health care system, and pension contributions for retirement.
Vadim Zaripov, head of the analytical department at Moscow-based law firm, Pepeliaev Group, said each company would have to pay more contributions to the state, per employee. Over the past seven years, the maximum tax base for compulsory social insurance contributions has doubled, from 415,000 rubles ($7,200) in 2010 to 815,000 rubles in 2017, he told Bloomberg BNA Oct 4. The tax burden on companies is growing in accordance with the average salary in the country, which will comprise 42,500 rubles in 2018, according to the Finance Ministry forecast, Zaripov noted.
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