Independent surveys found that Russians admit to incomes at least twice that. Tax avoidance has become a way of life. Employers withhold 60 percent of a salary for taxes. The government then taxes the rest at 20 to 35 percent. The withholding taxes are so high that businesses are often faced with the choice of paying salaries or paying taxes on the salaries.
Some companies just keep the money.
The worker is paid more, but doesn't pay taxes on the extra money. This sort of accommodation is becoming more common because the employees get paid, the tax burden on the business is reduced and the tax collectors still get something. That is the way we survive. A nation of survivors Oleg could hardly get a word in over tea. But in a subsequent conversation he said he was more optimistic than most people about Russia's future.