The increase of the VAT rate in Russia from 20% to 22%, along with other measures aimed at increasing tax collection, could stimulate some small businesses to shift their activity to the informal economy, indicates the Institute of Psychology of the Russian Academy of Sciences.
Signs that this trend has already started to appear are evident from a survey conducted by the institution in February, in which approximately 2000 urban residents participated. According to the research, 27% of respondents said that in the last six months they have been asked more often to pay in cash for goods or services.
The majority of city dwellers in Russia still prefer card payment, and the proportion of those who prefer cash is about 14%. However, among people with very low or very high incomes, this proportion is much higher.
Thus, 27% of respondents with low incomes say they prefer to pay in cash, and among those who can afford almost any purchase, the proportion reaches 24%.
The authors of the study conclude that tightening taxation and the deterioration of the economic situation could consolidate the behaviors of the underground economy among people with low incomes and, at the same time, could encourage tax evasion among those with high incomes.
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