Potential surge in Russian traffic penalties could multiply by eightfold
Hike in Traffic Fines: A Whopping Boost for State Purse Strings 🤔
The anticipated surge in state revenues from traffic law offenders is set to blow previous estimates out of the water, according to financial calculations by the Ministry of Finance. Instead of the projected 6.4 billion rubles, the Ministry estimates 52.8 billion rubles in traffic fine revenues 💸! according to a draft bill on budget amendments for the current financial year, as reported by the newspaper "Vedomosti."
But what has caused this extraordinary revenue spike? From January 1, 2025, penalties for speeding (Art. 12.9 CoA) see a notable increase, with fines ranging from 750-7500 rubles, replacing the previous range of 500-5000 rubles 🚦. Developers have pointed out that the share of 500-ruble fines for speeds of 20-40 km/h accounts for 73%!
💰💰💰 Quite a Golden Goose, huh? But that's not all... The system for discounted fine payments has undergone a revamp, too. The discount has been reduced from 50% to 25%, but the eligibility period has been extended from 20 to 30 days 🕒. Additionally, previously, payments were channeled into regional funds, but now, 25% of the funds go to the federal budget 💰.
Now, you might be hearing about some proposed changes regarding traffic fines, but here's a bit more context:
- Discount Time Again?: A draft law has been suggested to reinstate a 50% discount for paying traffic fines within 20 days. The aim is to motivate prompt payment and lower administrative costs.
- Stepped-Up Penalties: As of the New Year, penalties for numerous traffic violations have escalated. For instance, the fine for seatbelt noncompliance or running red lights now sits at 1,500 rubles. Plus, fines for speeding and other infractions have also seen an increase[3].
- Current Reduced Discount Structure: The existing discount for prompt fine payments currently stands at 25%, with motorists given 30 days to take advantage of this offer[5].
The changes in fines and their payment structure have the potential to significantly impact state revenues. On the one hand, a rise in fines promises increased revenues 💰💰💰. On the other, the proposed discount could lessen the revenue intake if more individuals choose to pay promptly to claim the discount[1].
The proposed changes in traffic fines, such as increased penalties for speeding and seatbelt noncompliance, offer the potential for significant revenue growth in the transportation industry, in particular the automotive sector, given their impact on state finances, which have already shown an unprecedented surge from traffic law offenders. Moreover, alterations in the system for discounted fine payments, including a reduced discount but extended eligibility period, as well as changes in the allocation of these funds with 25% going to the federal budget, have further implications for the finance industry, as these adjustments may affect both the revenue generation and expense sides of the state's budget.
