Profit Tax Reduction To Ease Tax Burden By 2% Of GDP

The reduction in the profit tax rate from 35% to 24% beginning January 1, 2002 will decrease the general tax burden by 2% of the GDP, Russian Deputy Finance Minister Alexei Petrov said at the international investment symposium 'The Investment Potential of the South of Russia' today. He pointed out that the reduction in the tax burden would be due not only to the decrease in the tax rate, but also to the introduction of the normal international procedure for calculation of the taxable amount. The new Tax Code chapter on the profit tax lifts all restrictions on deduction of business expenditures related to deriving profits from the taxable amount. Additionally, the Tax Code provides for a more flexible mechanism for amortization of assets for taxation purposes to boost large-scale investments, the deputy minister believes. According to him, as a result of the implementation of a number of tax initiatives at the beginning of 2001, the tax burden reduced by 2% of the GDP this year too.