Putin Offers Ways To Raise Russia's Federal Revenues Next Year

Next year's federal revenues are to grow as the taxable basis extends through an encouragement of private enterprise and cutting illegal turnover, President Vladimir Putin says in a budget message to the Federal Assembly, Russia's parliament, "On Budgetary Policies in 2002". The fiscal system has become not so burdensome as before, and more transparent to taxpayers now that Part Two of the federal Tax Code entered into force this year, points out the President. The fiscal reform must go on, and will proceed along several lines--in particular, to get through parliament a Tax Code chapter on profit taxation. According to it, economically substantiated business expenditures proved with documents--in particular, advertising and property insurance expenses--will be taken into account among other corporate expenditures. Next year must put on an obligatory footing the use of additional sum calculation method for revenue/expenditure accounting, as global practice has it. The cash method will hold good only for small business. The President calls to put an end to dual dividend taxation next year. Russia must, no later than 2003, finally oust from its fiscal system the taxation of commodity and service sale revenues, and taxation of rouble exchanges into foreign currency. Unified social taxation rates will gradually shrink with flat private income taxation to stay at its present-day 13% level. Reforms will involve the taxation of natural resource use to introduce and steadily extend renting patterns for the use of mineral resources. Related Tax Code amendments must be drawn and passed even within this year to serve as a basis for next year's budgetary policies, calls President Putin.

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