Moscow, 10 June: Wages paid illegally by employers in Russia have dropped to
32 per cent [of the total] this year against last year's level of 36 per cent, First Deputy Finance Minister Sergey Shatalov said during an online conference today.
"This is a significant advance and it's due to the lowering of the tax burden," he said.
But he pointed out that there is still a long way to go and the main obstacle to taking wages out of the shadow economy is the unified social tax. The Finance Ministry will work on amendments to this tax, he said. The idea is to narrow the eligibility criteria for the tax's standard rate of 35.6 per cent
so that "employers can sooner cross the threshold to qualify for the regressive social tax rates".
Shatalov added that the decision to exempt small businesses from the unified
social tax will be taken this year. The exemption will take place in 2003 and a standard rate will be set for the pension contributions which small businesses will pay instead of the unified social tax.