Izvestia: The Cabinet of Ministers refused to reduce VAT to 10 percent for the tourism industry 
– for the inexpediency of this type of assistance. Izvestia writes about this with reference to the report of the Cabinet of Ministers for the head of state, which is at the disposal of the publication.
According to the estimates of the Federal Tax Service (FTS), a reduction in VAT to 10 percent will not lead to a reduction in the cost of travel services for consumers. In addition, as a result of the tax reduction, the amount of annual losses from the budget will amount to more than 37.2 billion rubles – while in some cases the government will be forced to refund VAT to Russian tourism organizations, which, “in essence, will be a subsidy from the federal budget in the amount of VAT.” , indicated in the report.
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Such a measure of state support, which ensures the targeted use of the funds received, is not considered transparent. Nevertheless, the head of Rostourism Zarina Doguzova advocated a more radical reduction in VAT for the industry – up to seven percent (the letter of the head of the department to the Ministry of Finance dated October 25 is also at the disposal of the newspaper). It is noted that the 20 percent VAT rate for domestic package tours makes Russian destinations uncompetitive compared to foreign ones.
“The reduced VAT rate brings a tangible economic multiplier effect to these countries, where tourism is one of the priority sectors of the economy and is used as a driver of investment activity, “the letter says.
Earlier in November, representatives of the Russian hotel business asked the government to consider support measures for the industry. In the request, hoteliers indicated that due to the imposition of a number of restrictions amid the COVID-19 pandemic, they faced rising costs and falling bookings. The authors of the message suggested introducing “non-refundable rates”, reducing the administrative burden, as well as limiting the existing resort tax.