Finance Ministry ready to reduce VAT earlier than planned

The Russian Finance Ministry is ready to reduce the VAT rate by 2 percent starting in 2004, Finance Minister Alexey Kudrin told journalists today. Currently, the basic VAT rate is 20 percent. Kudrin also noted that, during today's Cabinet meeting, Prime Minister Mikhail Kasyanov had supported the corresponding proposal made by the Finance Ministry. Kudrin reported that the Finance Ministry would provide all necessary estimations to the government in April 2003. He admitted that the weakening of the tax burden would require "a tougher financial policy" from the government.

Earlier, the Finance Ministry proposed to introduce a reduction in VAT no earlier than in 2006.