Russian luxury goods tax to rise?Feb 7th, 2012 | By Eleanor Ward | Category: Featured
Russia has long been synonymous with the idea of luxury, with those who can afford to laden in haute couture and beautiful jewellery.
However, the accessibility of such items of desire could be set to change as the country's prime minister Vladimir Putin is reportedly considering introducing a tax on luxury goods. The proposals would see capture luxury items, such as jewellery and sports cars. But expensive real estate is also set to come under the banner should the new tax be introduced.
At the moment, nothing is concrete and the tax has only been raised in an article by Putin in the newspaper Vedmosti. However, major decisions on the issue will be taken later in the year, although the prime minister has assured Russians that he will “resist the temptation to adjust the tax system to meet increasing expenditure commitments”.
“Such a policy increases uncertainty of the economic environment for business, thereby seriously impairing the investment attractiveness of our economy,” he added.
However, not everyone is likely to be comforted by such statements. Russia already has a high import tax imposed on many goods and the luxury end of the market is really only accessible by the very wealthy sector of society.
One theory is that the changes could prompt Russians and expats resident there to head overseas to do their shopping, prompting an influx of business for European cities and manufacturers.