Duma refused to revoke bank secrecy for individuals

21.05.2012 The Budget and Tax Committee of the State Duma has rejected a bill proposed by Ministry of Finance of the Russian Federation moving the amendment to the Tax code which could allow tax inspectors to request information on amounts held on individual accounts from banks.

Today the Federal Tax Service of Russia during its tax control may request information on amounts of only legal entities and individual entrepreneurs. The bill could give an opportunity tax authority to check income declarations submitted by individuals.

However, the head of the Budget and Tax Committee - Andrey Makarov - did not uphold this amendment, opining that “there was no reason to change the current procedures” and furthermore “the approval of this amendment would lead to a huge outflow of bank deposits”.

In addition, some experts admit that the State Duma’s deputies by formally taking the part of tax payers have not forgotten about their own interests, taking in account that measures of tax control could be also applied to them.

Nevertheless, despite the refusal of Duma’s members to revoke bank secrecy for individuals there are still some cases when banks are to disclose data on the accounts of their clients, and namely on request from “authorized foreign authorities in cases envisaged under Russia’s international treaties” and from law-enforcement authorities of the Russian Federation in order to investigate criminal offences.

Expert’s opinion

“Indeed this is an illustration of protection and inviolability of privacy guaranteed by the fundamental law of the country – the Constitution. Nevertheless, the bill itself is directed at the replenishment of budget. And one should understand that implementation of such changes means only the following: the closing of accounts in Russia and withdrawal of funds oversea.

Already now people are more likely to save and increase their assets through the stable and safe foreign finance bodies, including those in Austria and Germany, where economics has the positive dynamics”

On the basis: http://www.komitet2-11.km.duma.gov.ru/

Irina Lomakina ( Director of the Moscow office of Honest & Bright)