MOSCOW, April 6 (Reuters) - Russia will postpone by one year a planned increase in the pension and social security tax and cover any resulting pension fund holes from the sovereign wealth fund, Prime Minister Vladimir Putin said on Monday.
Pensions are a big issue in Russia, the world's second largest oil exporter, where pensioners make up one-fifth of the population and where the average pension is still below the minimum subsistence level.
Plans to up social security charges by about $30 billion a year through swapping the current tax for three separate levies worth up to 34 percent of salary met with fierce resistance from businessmen, who want the government to cut taxes.
"In the global crisis environment we should further cut the fiscal burden on the economy, whatever it is called - taxes, fees or contributions," Putin told the Duma lower house of parliament. "I believe it is possible to meet the demand of the business community and ... not to raise the Unified Social Tax until January 1, 2011," Putin said. The government introduced numerous tax breaks for businesses in recent months.
Putin said cash from the federal budget and the $85.5 billion National Wealth Fund will help the government stick to its plans to raise nominal pensions by 24 percent in 2009 as well as raise the value of pension rights acquired before 2002 by 10 percent. (Reporting by Gleb Bryanski; Editing by Ron Askew)