Russian President Putin offers week-long social package to battle coronavirus

To lend a hand of support and assure the Russian citizens that the government would reach any ends to support them amid the unprecedented coronavirus outbreak, President Vladimir Putin on March 25 proposed various unconventional emergency social measures to support families and businesses, such as a week-long holiday for workers and higher taxes on dividends.

Bonus for workers

During a televised address to the nation, Putin sought to reassure Russian citizens and markets that the government would use all of its available force to stave off economic collapse. Russia till now has reported 658 cases of coronavirus, with March 25 seeing its sharpest increase in new cases, and says nobody has died. But the economy has been hit by prolonged uncertainty over coronavirus and tumbling oil prices, which has seen the rouble fall to four-year lows.

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Putin’s announcement that next week, beginning on March 30 would be an extended holiday for workers, except key businesses like pharmacies, banks, and supermarkets, was an unconventional step. Some other countries have preferred locking down cities, with people only allowed out for food and medicine. Putin said that Russia’s economy, like that of other countries, is under strong negative pressure because of the consequences of the epidemic and It is now crucial to prevent the threat of the disease spreading rapidly. Therefore he declares the coming up week a non-working week with pay.

Alongside this measure, Putin said unemployment benefits should be lifted to mirror the minimum wage, at 12,130 rubles ($153) a month, specifically mentioning the need to support young people, a group of voters he has traditionally found harder to win over at elections. He suggested increasing child benefits by an extra 5,000 rubles a month for all children under the age of three and also proposed a six-month moratorium on tax payments for small and medium-sized businesses. To combat capital outflows, Putin said all interest and dividend payments that leave Russia should be subject to 15 per cent tax, up from the current level of 2 per cent.

Furthermore, Putin said Russia would tax interest payments on deposits of more than 1 million rubles, a measure he said should help allocate additional funds to fight the economic impact of coronavirus. Putin did not mention how much his new measures would cost the budget, which is expected to see a 3 trillion rouble shortfall this year from the weak commodity prices only.

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