Use of Taxation Laws to Undermine the Work of NGOs

Repressive tax laws have been a big problem for civil society organizations and make virtually every NGO in Russia a potential tax offender. Many leading civic groups in Russia have recently been targeted for lengthy, biased tax inspections, resulting in very high penalties threatening bankruptcy. As a rule, such inspections are triggered by an organization’s criticism of government’s actions and are aimed at paralyzing an organization’s work and threatening it with closure. Absurd tax violation charges often include claims of profit tax on charitable grants, personal income tax and social tax on compensation for expenses of volunteers, compensation for travel expenses of participants of conferences, and awards to winners of high school student essay competition. Hostile rhetoric by authorities creates a climate of suspicion against NGOs, marginalizes them, and effectively encourages arbitrary actions of the tax authorities.

Recent targets of harassment by tax authorities include International Memorial Society, Russian-Chechen Friendship Society, “Open Russia” NGO, Union of Soldiers’ Mothers Committees of Russia, Russian Pen Centre, Forum of Migrant Organizations, Center for International Protection, etc. The latter is a leading Russian NGO in submitting complaints to the European Court of Human Rights; it was charged with more than 135 thousand Euro in allegedly unpaid taxes on charitable grants.