Duma might retain sales tax

State Duma Budget Committee Chairman Alexander Zhukov believes that the lower house of the parliament will adopt the government bill on tax reforms on its first reading, however some amendments will be made by the second reading. He has voiced his opinion to journalists today. Zhukov thinks the key issue of the future debates will be the question of canceling the sales tax. The government suggests that this tax should be abolished as of January 1, 2004. However, many deputies insist on retaining this tax. At its meeting on June 2 the Budget Committee is likely to recommend this tax should be retained, he noted.

Moreover, the Committee will also consider the government's proposal to cut the value-added tax from 20 to 18 percent. However there are two alternative bills in the State Duma that envisage a decrease in the VAT to 16 or 15 percent, Zhukov added.