Putin Calls Luxury Tax Payment for ‘Vanity’ Over Investment

Russia’s plan to tax luxury goods would serve as a levy on “vanity” purchases made at the expense of investment, Prime Minister Vladimir Putin said.

“It should be something like a publicly recognized payment for refusing to invest in development in favor of unrestrained consumption and vanity,” Putin said today at a meeting in Moscow of the Russian Union of Industrialists and Entrepreneurs, a lobby group for big business.

Putin, who is running for president in a March 4 election, proposed the tax during a speech at a congress of his United Russia party in November. The government has already decided to implement it and is trying to create a list of goods such as “superyachts” and “supercars” that would be included, Putin told supporters on Feb. 7.

“Let’s not exaggerate the fiscal significance of this tax,” Putin said today, adding that it shouldn’t affect the middle class, he said.

To contact the reporter on this story: Anton Doroshev in Moscow at adoroshev@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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