Finance Minister on tax reform

The Russian Finance Ministry is ready to decrease the tax burden more considerably in the country, in the event non-interest expenses of the federal budget are decreased more considerably than it was initially planned, Finance Minister Alexey Kudrin declared at a meeting of the Board of the Economy Ministry today. He pointed out that it was planned to decrease the tax burden by 1 percent of the GDP annually. The minister stressed that the resources of the stabilizing fund should not be used as a source for lowering the tax burden.

The plan of decreasing state expenses is the government priority, Kudrin said. If there is a decision on a further drop in budget expenses, the Finance Ministry is ready to work out a more radical tax reform, he reiterated.

At a meeting of the Cabinet of Ministers on March 13, Kudrin declared that the ministry was ready to decrease the value-added tax rate by 2 percent as of 2004. Earlier the Finance Ministry suggested that the VAT rate should be cut not earlier than in 2006. The current VAT rate is 20 percent.