Russian Finance Ministry Suggests Taking Riches from Oligarchs

Prime Minister Kasyanov is very unhappy about Finance Ministry’s activity

Yesterday, the Russian government was going to discuss the future of the tax reform. As PRAVDA.Ru reported before, suggestions and calculations that were supposed to be prepared by adequate bodies according to Prime Minister Mikhail Kasyanov's instructions, were not ready. Finance Ministry, the Ministry for Economic Development and Trade, failed to come to consent on the issue, so it was not possible for them to finish off with those preparations by February 15th. Mikhail Kasyanov had to state at the session that the government had lost any chances to run the tax reform in 2004.

Prime minister’s subordinates attempted to make some excuses about such a failure. This resulted in a conflict between Mikhail Kasyanov and Finance Minister Aleksey Kudrin. The discussion of the reform as it is (the reduction of the value added tax rate in particular) was pushed into the background. The session turned to the pretentious discussion of several abstract issues. It is still unclear, what the Russian government is intended to do with taxes this year.

As it turned out, the prime minister’s unhappiness was caused with debaters’ obscure and indefinite position concerning the further reduction of the tax burden. The Ministry for Economic Development and Trade demands taxes should be reduced immediately, while the Finance Ministry is certain that it is necessary to adjourn that for a while. Mikhail Kasyanov scolded the two departments for their inclination to make statements instead of making certain plans with certain dates. In particular, Kasyanov reproached German Gref (the Minister for Economic Development and Trade) of the fact that the ministry did not have the precise opinion and calculations regarding what the tax reform might lead to in 2004. “Take a firm position, explain it, and keep it,” Kasyanov said to Gref.

Kasyanov also criticized the Finance Ministry for unprepared tax reduction calculations. “I am afraid of the fact that there were no forecasts and calculations for six months, although we suddenly learn that it is possible to reduce the value added tax rate,” Kasyanov stated about Finance Minister’s unexpected suggestion to reduce the VAT rate by two percent already in 2004. However, the discrepancy between the prime minister and Finance Minister, Aleksey Kudrin, turned out to be a lot more serious. Mikhail Kasyanov did not blur the disagreement, though.

Aleksey Kudrin had a meeting with Russian reporters yesterday. During the briefing he offered to “ expropriate expropriators.” Aleksey Kudrin stated that the government is supposed to take a big part of oil companies’ profit away from them. A big part of their profit means the extra that oil companies get over $25 dollars per barrel. “The state is supposed to be bolder in taking away petroleum extra-income,” the finance minister told reporters. Thus, as Aleksey Kudrin believes, it will be possible to restrain the inflation rate within the scope of the governmental forecast. One shall assume that there is no other way.

By the way, Mr. Kudrin is absolutely not original with such a proposition of his. Russia’s public opinion has been rather aggressive lately. They urge to reallocate oligarchs’ extra-income in a more decisive way, in favor of socially unprotected Russian people. It is worth mentioning here that such an idea has a common sense to it. Aleksey Kudrin’s suggestion is peculiar for the fact that he suggested to do so in favor of the government. Needless to mention that governmental officials do not have any needs. Yet, Kudrin never mentioned anything about children, pensioners and disabled people.

It goes without saying that a statement of that kind released from a senior governmental official on the threshold of elections might be interpreted in the wrong way. Mikhail Kasyanov had to correct his colleague today. The prime minister stated that the final goal of the reform is to get rid of excessive functions of the state. As he asserted, “the state and law-enforcement bodies keep showing tough pressure on business, while nothing was done last year for solving the issue.” The goal of the state is to create more favorable conditions for the business development. Yet, Prime Minister Mikhail Kasyanov reminded with a reference to President Vladimir Putin that there are no untouchable fields in the country’s life. Even small children see that there are a lot of untouchable fields in Russia. Officials did not say anything about taxes. What are they thinking about?

Kira Poznakhirko PRAVDA.Ru

Translated by Dmitry Sudakov