AKIT opposed sales tax

Major Russian online retailers opposed the introduction of sales tax. They believe that it will place an additional burden on bona fide players, while most market participants already use tax avoidance schemes.

The Association of Internet Commerce Companies (AKIT) sent a letter to the President of the Russian Federation, Vladimir Putin, in which he spoke out against raising the tax burden.

The introduction of the sales tax will primarily "affect the legal segment of the Internet business market, operating in retail, since unscrupulous small players will evade the tax," says AKIT. The association estimates that the share of online retailers currently using illegal tax optimization schemes is over 60%.

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Law-abiding companies will also be pushed into the "gray" zone, as a sales tax of 3% will double the tax burden on market participants. "Thus, the introduction of the sales tax will not ensure an increase in the revenues of the state budget. On the contrary, this, due to the reduction of the tax base, will help to reduce tax collections," the message says.

The Ministry of Finance has developed a bill providing for the introduction of sales tax from 1 January 2015 year. The tax base is defined as the value of goods or services sold, including VAT and excise taxes. The tax rate will be set by the constituent entities of the Russian Federation within 3%.