The Central Bank is ready to conceptually support the initiative to increase tax benefits for citizens who independently save money for old age. The regulator promises to present specific parameters for discussion. This follows from a letter from the Deputy Chairman of the Central Bank Vladimir Chistyukhin (Izvestia has the document) in response to requests from specialized self-regulatory organizations (SROs). Over the past year, they have repeatedly proposed introducing a separate tax deduction for those who independently save up for retirement within the framework of non-state pension provision (NGO) – similar to the existing one for individual investment accounts (IIA). The Central Bank believes that this will help level the competitive environment for financial organizations and increase incentives for Russians to form long-term savings. Experts are sure that tax preferences alone are not enough to fully motivate citizens.
Equate to investors
As Izvestia already wrote, the Association of Non-State Pension Funds Alliance of Pension Funds (ANPF) and the National Association of Non-State Pension Funds (NAPF) have repeatedly appealed to the Central Bank with an initiative to introduce a separate pension tax deduction by analogy with the one that exists for citizens investing money in IIS-1. According to the authors of the initiative, this could motivate citizens to independently save for the future within the framework of NGOs.
Now such citizens can claim social tax deduction. The maximum amount with which it is calculated is 120 thousand rubles per year. The maximum deduction is RUB 15.6 thousand. It has four components: medical, educational, life insurance, and retirement benefits. The size of this deduction has not been indexed for more than 10 years, while “medicine and education“ choose ”almost the entire share of the tax deduction, and the low personal income tax rate makes it even less attractive,” the SRO emphasized in an appeal to the regulator.
The authors of the initiative suggested considering the option of increasing the limit to 400 thousand rubles (or, as an option, up to 6% of the salary) and allocating it as a separate tax deduction. The amount was chosen for a reason: 400 thousand rubles is the maximum bar (tax deduction – up to 52 thousand rubles) for calculating benefits when citizens invest in the IIS of the most demanded first type. It was the introduction of tax incentives that allowed this instrument to develop. As reported on Monday by the Moscow Exchange, the number of IIAs has reached 3.8 million. In four years, the growth is 15 times. At the same time, the number of insured in the NGO system stagnates at about 6 million, and the volume of their investments did not exceed 1.5 trillion rubles. Pension SROs believe that it is necessary to provide equal benefits for investments in investment accounts and voluntary pension programs.
Finally, the regulator had its say in this matter. As stated in the letter of the Deputy Chairman of the Central Bank Vladimir Chistyukhin, “the provision of additional tax benefits to clients of non-state pension funds (NPF) within the framework of NGO activities, similar to those provided as part of the implementation of IIS, will help to equalize competitive conditions for financial organizations of different types and increase incentives for formation of long-term savings ”.
“In this connection, this initiative can be conceptually supported,” the letter from the Central Bank said.
The Bank of Russia considers it important to create equal tax preferences for similar financial products intended for long-term investments and savings, including within the framework of NPF NPF programs, the press service of the regulator confirmed. The issue is under discussion with market participants and interested government agencies, specific proposals will be formulated based on the results of this discussion, they added.
It should be noted that in addition to the above option, profile SROs also proposed others. For example, consider the creation of a new instrument IIS-3NPF, as well as introduce “pension subsidies” for the poor, housewives, etc.
Good but not enough
For market participants, the very fact that the Central Bank agreed with their position is important. According to the president of SRO NAPF Konstantin Ugryumov, it is valuable that the regulator fundamentally supported the proposals on tax incentives for citizens who independently form their pensions in NPFs. At the same time, in his opinion, this is an important motivation, but insufficient.
– Due to the fact that the task of increasing pensions is much more social than investment, we believe that to attract citizens to the NGO system the motives should be more serious than for IIA, – believes Konstantin Ugryumov.
He is sure that, in addition to tax incentives, it is necessary to stimulate citizens to independently accumulate for retirement at the expense of state co-financing and state guarantees of contributions for NGOs. In the plans of the Ministry of Finance’s legislative activities, the development of a premium insurance project is only for 2022.
Yuri Nogin, director of the methodological department of the National Rating Agency (NRA), agrees that it is logical to equalize tax preferences for IIS and NGOs. But for this measure to bring positive results, there must be more incentive mechanisms, he is sure. For example, increasing the financial literacy of the population and increasing confidence in the institution of NPF.
The equalization of the conditions of benefits for NGOs and IIAs should increase the competitiveness of pension products and revive this market, agrees Artem Afonin, junior director for ratings of insurance and investment companies of the Expert RA agency. He believes that this will be a significant argument in favor of NGOs for high-income citizens. And also for those who already have certain savings in the form of a deposit or funds on the same IIS, which can be converted into pension products. He also believes that the increase in benefits can attract more people of mature and pre-retirement age, who are more involved in NGO programs than young people and, at the same time, are more conservative in their choice of financial products.
In order to extend voluntary programs to a mass investor, it is worth increasing the welfare of citizens, noted Artem Afonin. Associate Professor of the Department of Accounting and Taxation of the PRUE G.V. Plekhanova Ravil Akhmadeev also believes that in order to stimulate voluntary savings for retirement, it is necessary to increase the income from which contributions will be made. As an example, he cited the experience of co-financing pension savings, which was not in great demand from the population due to periodic crises in the economy.
– Only cosmetic tax benefits cannot solve the pension problem. It is important to reform the current pension legislation, the expert says.
In any case, the Ministry of Finance must have its say on the issue of new tax benefits for NPF clients. According to the calculations of Yuri Nogin from the NRA, based on current market conditions, 25.7 billion rubles will be needed for the pension tax deduction for NGOs. It is quite a lifting amount for the budget, he said.
The press service of the Ministry of Finance told Izvestia that no proposals have yet been received by the department.