Transport Tax Will Be Increased By 2009
Rumors of a city transport tax being increased 150% by 2008 stirred up a storm of emotions among Moscow’s three million car owners. However, last week the tax raise was postponed. The Moscow government decided not to bring this draft bill into the Moscow Duma for a second reading, even though very recently it was planned to raise the city’s tax, based on the horse-power of the vehicle, starting January 1, 2008.
A few months ago, deputes of the Moscow Duma unanimously voted down the unpopular measure, which would have raised the tax rate for cars with over 100 HP – which includes most cars preferred by Moscow’s new middle class and most foreign model cars. The Deputy director of Moscow’s Department of Economic Policy and Development, who presented the draft before the city Duma, explained that the rate has been adjusted according to the projected growth of average salaries for 2006-2007. According to economists’ calculations, that rated amounted to 150% - thus raising the transport tax by 150% would be justifiable. The Moscow Duma Deputes did not agree to this logic.
However, recently the Moscow government sent a new draft on transport tax for deputes’ approval, amended to adjust the tax rate starting in 2009, rather than January 2008. However, exactly how the new bill would adjust the rate was not announced.
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