Legislators propose to increase the fine for failure to pay taxes and insurance contributions

A group of deputies proposed to encourage employers to formalize labor relations with employees by increasing the fine for failure to pay or incomplete payment of taxes and insurance contributions.

Currently, pursuant to Article 122 of the Tax Code of the Russian Federation, the penalty for non-payment or incomplete payment of a tax (a fee, or an insurance contribution) as a result of understating the tax base or other illegal actions is 20% of the unpaid amount. In the event deliberate tax default is uncovered, the fine is set at 40% of the unpaid amount. The deputies propose to achieve the desired effect by increasing the fine to 100% of the unpaid amount. In addition, it is proposed to make similar amendments to the Federal Law "On Compulsory Social Insurance against Occupational Accidents and Occupational Disease".

The Government's response to the current version is so far negative: it is not clear why a positive effect is expected specifically from a 2.5-fold increase, or why the wording used extends the effect of the proposed measures to all taxes.

The consideration of the proposed amendments is ongoing, we will keep you updated.