Russia's State Duma proposes to abolish VAT

The value added tax (VAT) should be abolished in Russia, first deputy chairman of the State Duma Commission on Small and Medium-Sized Businesses Nikolai Arefiev said in an interview with the Rossiya-1 television channel.

"I believe that VAT is a contrived tax. We propose to gradually abolish this tax. First, it is very difficult to administer. And, second, our products are 20% more expensive, which means it is not competitive either on the domestic or on the world market," the deputy explained.

Arefiev drew attention to the need to abolish VAT on product categories, and not reduce its rate.

The deputy explained that due to lower prices, consumption of goods will increase, and the abolition of VAT will be offset by an increase in income tax collections.

"I believe we will submit such a law to the State Duma in two months," the first deputy chairman of the Duma Committee for Support of Small and Medium Business said.