Kremlin Announces Stricter Measures to Combat Covid-19 as Putin Postpones Vote on Constitutional Amendments & Orders Higher Tax Rate on Wealthy; Putin Offers Medical Aid to U.S., Trump Accepts

In order “to avoid endangering the health of Russian citizens due to an unfavorable epidemiological situation,” Putin signed a decree last week postponing the national vote on the proposed amendments to the country’s constitution, which were originally scheduled to take place on April 22nd. The new date will be determined later and announced via another decree. According to the Russian news agency TASS:

Putin stressed during his address to the Russian nation earlier on Wednesday that ensuring public safety and health is a top priority. “I believe that the vote needs to be postponed to a later date. We will see how the situation unfolds in the regions and in the country on the whole, and will make a decision on a new date based on expert opinion,” he emphasized.

On the same day, Putin outlined a package of measures intended to stabilize the economic situation in Russia amid the pandemic. The measures included a 15% tax on Russian wealth being parked outside of Russia. RT reported Putin’s comments as follows:

“Currently two-thirds of such funds, and, in fact, this is the income of specific individuals (as a result of various kinds of schemes of the so-called optimization), are subject to a real tax rate of only 2 percent. While citizens, even with small salaries, pay income tax of 13 percent. This is, to say the least, unfair. Therefore, I propose for those who withdraw their income in the form of dividends to foreign accounts, to provide a tax rate on such dividends of 15 percent.”

Putin added that Russia is prepared to “withdraw from agreements on avoiding double taxation with countries which disagree with these measures.”

Putin also announced tax and loan deferments for small and medium sized businesses for the next six months as restaurants and cafes have now been ordered closed. VAT would be excluded.

“I consider it necessary to provide tax deferrals for all taxes for small and medium-sized businesses, with the exception of VAT, for the next 6 months. In addition to such deferrals, a deferment on insurance contributions to social funds should be given to micro-enterprises,” he said on Wednesday during his televised address to the.nation over coronavirus spread.

SMEs, as well as microenterprises, which find themselves in the most difficult situation, should receive loan deferments from banks for the next six months, Putin said .

“As for bank loans, small and medium-sized companies, microenterprises, which find themselves in a difficult situation, should receive loans deferments for the next 6 months,” he said. According to him, small and medium-sized enterprises now face objective difficulties – decline in orders and in revenue. He noted that such companies need help to continue their activities, and therefore to keep their employees.

All social benefits over the next six months would remain without need for periodic confirmation of eligibility during that time, an additional 5,000 rubles will be provided for each child under the age of three from April through June to families receiving maternity benefits, benefits for children aged three to seven will begin earlier, and unemployment insurance and sick leave at least equal to the minimum wage will be provided at least through the end of the year.

Starting this week, Moscow is on lockdown with residents only allowed out of their homes to obtain groceries and medical care. Essential workers will need official permits to move around. According to RT correspondent Murad Gazdiev:

Only people with city-issued “quarantine passes” (doctors, officials, store workers etc) will be allowed to move around the city (to and from work).

As of last Friday, the number of cases in the country had risen by almost 200 to 1.036, with 4 deaths. By Monday, there were 1,840 confirmed cases with 16 deaths. 194,353 people, mostly Russians returning from abroad, were in medically supervised quarantine.

Other legislation related to the pandemic has passed the Russian parliament, including laws that provide for fines on those who are caught breaking the quarantine as well as harsh punishments of those who disseminate false information or fake cures for the virus. The media watchdog for the OSCE raised the following concerns:

VIENNA, 31 March 2020 – The OSCE Representative on Freedom of the Media, Harlem Désir, expressed his deep concerns today about amendments to the Russian legislation, imposing up to five years in prison, for spreading false information about the COVID-19 pandemic.

The amendments were approved by the State Duma and by the Federation Council of the Russian Federation today. They toughen liability and punishments for the dissemination of false information that could threaten the life and safety of citizens. They were made both in the Code of Administrative Offenses and in the Criminal Code of the Russian Federation. The amendments include punishments for the spread of false information about measures that the authorities take to ensure the safety of the population and territories.

“I share the concern of the Russian Duma to combat the dissemination of false information related to the current health crisis,” the Representative said. “However, the amendments to the Code of Administrative offense and to the Criminal Code, as envisaged, pose a risk of undue restriction on the work of journalists and of self-censorship for media actors trying to inform the public.”

“I call for a greater consideration of the principles of necessity and proportionality in the new amendments. The amendments should also clearly guarantee that the right of the media to report on the pandemic will not be constrained by the new legislation, which should only aim at combating intentional disinformation that is detrimental to citizens’ health. The media and independent journalists have an important role to play in the fight against disinformation, especially online, and they should not be unduly restrained in their reporting on the pandemic,” said Désir.

In a telephone call on Monday with Trump, Putin offered pandemic-related medical aid to the U.S., which Trump accepted. Here is what RT reported yesterday (emphasis mine):

A cargo plane loaded with medical supplies and protection equipment may depart for the US by the end of Tuesday, the Kremlin said, after a phone call between US President Donald Trump and Russian President Vladimir Putin.

The issue of protective gear was raised during the Monday phone talks, with Putin asking if the US needed help and Trump accepting, Kremlin spokesman Dmitry Peskov told reporters on Tuesday.

Moscow suggested the aid in anticipation that the US will be able to return the favor if necessary, once its manufacturers of medical and protective equipment catch up with demand, Peskov said.

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