Salaries have also increased slowly to a more acceptable level, mostly within the private sector

Lifestyles for many of the people working in the private sector, has improved dramatically

These are known as "The New Russians"

Unfortunately, those working for local authorities, including hospitals, schools, colleges and universities, barely earn enough to live and life is becoming more and more of a struggle. For these people, lifestyle has suffered. Wage increases are small, if at all and never take into consideration the high rate of inflation. They have had to adjust their family life and lifestyles to such an extent that many, now consider meat, fruit and confectionery as luxuries they can only occasionally afford

Government employees and in particular teachers and doctors all over Russia, can have their salaries delayed for months. It started years ago with a late payment and had a 'knock-on' effect. Many people have salary arrears of up to 6 months and up to 12 months is not uncommon. Even working for private companies does not guarantee salaries are paid on time

Business and Taxes

Running a business in Russia is a big challenge even in the big cities

Nearly all business' are small and tend to copy each other, especially in the smaller cities and towns. Shops are a typical example in the smaler cities and towns. They tend to stock the same products, which are often low quality and not necessarily what the people would like to buy. The level of service is low and sometimes non-existant. Staff have very little knowledge of the products they are selling and/or have no interest in the shopper. It may be true to say that in many instances, the shop staff consider a customer an inconvenience because it interrupts their reading a book or magazine or their conversation with a friend or collegue

The collection of taxes is still one of the biggest concerns for Russian government as it is one of the most complicated collection systems in the world. Reform is coming but is extremely slow. Only recently has the personal tax been reduced to a level which is acceptable and more revenue is being collected

Business tax is very high creating a big barrier for people wanting to start their own business. Business accounting is very complicated and must be done on a monthly basis. Fines are incurred if you don't adhere to the rules of the system, which are regularly changed without warning

It has been announced that the tax on business will be reduced significantly and made less complicated in the hope that it will have the same effect as personal tax revenue collection in creating more revenue