The Russian economy looks like this today: one million people extracts oil and gas, majority of which is exported. The proceeds are used to pay taxes, payment to this million and purchase of goods abroad. This million actively spends money for goods and services, including import. Another 10-12 million people receive money from the first million for services and buy services and goods using this money, increasing the circle of involved.
The government distributes taxes obtained from oil and gas to about 25-30 million officials, pensioners and etc, who also consume services and goods.
The country does not produce enough products itself and the main capital invested into that also came from the oil industry. The conclusion is if it is not for this money, the volume of Russian economy would have been much smaller. The volume of non-raw material GDP in Russia is only about $300 billion. This is even less, than in Ukraine per capita.
The claim that the government supports a significant part of population by incomes from oil and gas is not exaggeration. Almost 53% of incomes of the federal budget are ensured by proceeds from tax for extraction of natural resources. Its share in the consolidated budget is about 40%.
Majority of these resources are used to buy food products and other goods abroad. The technologies do not exceed 10% of import. The excises and duties paid during import of products constitute about 30% of the consolidated budget. VAT is deducted during sale of imported products, which makes another 12-15% of the budget. Therefore, almost 82% of the Russian budget is replenished at the expense of oil and gas incomes and their direct derivatives – import tax.
Profit tax constitutes 5% of the consolidated budget. How much of it was deducted from salaries of oilmen or budget organizations’ employees, who derived profit from the oil taxes? The same is applied to the profit tax and etc. In other words, Russia has the raw material economy and the Putin’s state can exist only by selling oil and gas.
As far as inflation is concerned, it will continue growing, because this is a vicious circle – inefficient monopolies are subsidized by the state, subsidies are poured to the market and the monopolies raise fees, because they are inefficient, writes www.maxpark.com.