People are really sensitive to their financial burden increase

25 january 2016 | Ogoniok

As the budget is running low, the Government is coming up with new ways expropriating more money from ordinary Russians. And it is not just higher taxes or new fees and duties the Government is resorting to, but fines as well. The Deputy Head of the Analytical Center Gleb Pokatovich believes that, to a large extent, the extent of the negative reaction is a result of the crisis.

Gleb Pokatovich
Gleb Pokatovich
Deputy Head

“When real income has been falling in real terms for 12 months now and the collapse in personal consumption is setting 20-year records, any move to increase the financial burden on the people is bound to bring about a hugely negative reaction,” Mr. Pokatovich commented on the current situation in his interview to an Ogoniok Magazine correspondent. For example, people immediately took notice when a new item called “major repairs” was added to their utility bills, the expert noted. Having to pay more, and often significantly more, here and now in order to get some uncertain returns in the future, caused a major backlash, he explained. And that despite the fact that, as Mr. Pokatovich specified, the total amount of taxes and fees paid by the ordinary Russians has not really changed that much in the past couple of years. “Moreover, people are often not even aware of a significant portion of the taxes they pay as their personal income tax is paid by their employer on their behalf. Nor do the vast majority of the Russians directly pay the insurance premiums to the off-budget funds (pension, medical and social insurance) that are also paid for them by their employers. Indirect taxes such as VAT and excise are included in the price of goods and services so people do not get to see them either,” the expert explained.