Fair and Balanced

As from January 1, 2012 the rates of national insurance contributions, a levy on one's salary, will go down from 34% to 30% and for small businesses, except trading companies, from 26% to 20% and will stay at this level for two years, announced President Dmitry Medvedev calling the decision ‘fair and balanced’.

Taxation of payroll in Russia remains an economic conundrum: with national insurance covering only the first 463,000 roubles ($16,500) per year and income tax at the flat rate of 13%, the system is not only decidedly soft but unlikely unfair. The rich are getting richer and the poor poorer.