Tax amnesty is a very essential scheme that is a boon for tax payers. Tax amnesty is defined as an opportunity given to a tax payer, in order to correct his errors of a liability in tax relating to previous years and without being prosecuted with criminal offense. This opportunity is given at random in different countries. In Russia, the tax amnesty was begun on March 1, 2007 and ended on January 1, 2008. Tax payers have to pay tax at the rate of 13% for all income which is not legal received before January 1 of 2006.
Most of the companies in Russia follow the double dealing accounting. Double dealing accounting is nothing but receiving money in both formal and under the table. This is also known as black accounting. This type of accounting came into picture because of the Old Russian tax code. If all companies paid their taxes then and there for that particular financial year then companies would definitely come to the roads. To prevent such a situation, tax amnesty system came into existence.
But this law must not be misinterpreted. It is to be clearly noted that income which is obtained illegally by breaking the code of conduct or through a criminal offense do not have this amnesty. In accordance with the current law, this case is treated as a violation of not paying the taxes and these people become violators if their annual income is more than 100 thousand rubles.
Due to the native nature of the Russians they do not opt for tax agencies as they have the fear that they may turn up against them. They do not also disclose their original income or their source of income.
As expected the amnesty system did not click well in Russia. The expectations were far from beyond the reality. This gives a hint that all companies in Russia perform double dealing accounting and that it’s the perfect place for starting a business.
When the expected collection during the amnesty period was about $ 5-7 billion, the reality hit hard at $ 1 billion. This really shows how the system proved to make an impact. In other words how people failed to make use of this opportunity. Investing in the Russian economy would be one of the wisest decisions to make. But many people have missed it out.
People still have to develop beliefs in the good intentions of the government authority. But for people who believe the good government chances of grabbing the next amnesty period would be climbing on their minds. Thus expectations and reality have really proved to be different in the previous amnesty period.
But what the future holds is a serious question for which the answer is still yet to be known. Considering the economic breakdown, investing in your economy can be fruitful. The saying “Small drops make a mighty ocean” is sure to hold good here as what give to the world, the world gives it back to you.