Russian Finance Minister states that the flat tax is permanent

Finance Minister Alexei Kudrin said Tuesday that Russia would stick with its 13-percent flat income tax, despite speculation it would be raised as soon as more people start declaring their real incomes. The new tax, to take effect next year, replaces a progressive system with rates ranging from 12 percent - covering about 90 percent of the population - to 35 percent. The idea behind the flat tax was to get more people to disclose their real incomes in a country where tax evasion is rampant, and to spur economic growth. Analysts have speculated the tax is designed to coax the country's new rich into entering the tax system before officials raise rates. But Kudrin said the flat tax was permanent: ``Talk about taking more from the rich simply isn't serious,'' RBC reports.