Russian Economic Development Ministry Proposes Tax Reductions

The Russian Ministry for Economic Development has proposed lowering taxes in Russia by six percent of GDP over the next three years. According to Rosbalt's correspondent, this was announced on Tuesday at the 'Developing the financial market and companies in the North-West Federal District' conference by Russian Deputy Minister for Economic Development Arkady Dvorkovich.

'Taxes in Russia are currently unacceptably high, so we are proposing to reduce them,' stressed the minister. Specifically, according to the ministry's evaluation, VAT needs to be reduced to 15% and the single social tax to 30%. Property taxes for companies should not be raised, and 'a simplified taxation system' needs to be introduced for small business. 'There is no need to change taxation levels for the general public, although well-off citizens, who make up about 5% of the population, need to be taxed according to the market value of their property,' believes Dvorkovich. In his opinion, such a level of taxation will bring Russia into line with Europe, and Russia's tax reforms could then be considered complete.

The 'Developing the financial market and companies in the North-West Federal District' conference took place in St. Petersburg yesterday. The event was organised by the Federation Council, the State Duma, the President's representative office in the North-West, the Association of North-West Banks, and the National Grants Association. The conference was the first of a series of events devoted to the development of the financial market which will take place throughout 2003 in all the federal districts.