Finance Ministry's official on VAT cuts

In 2006, the VAT may be cut to 15 percent in Russia, Russian Senior Deputy Finance Minister Sergey Shatalov told reporters today. He reiterated that the tax reforms proposed by the Russian government envisaged, among other things, a reducing in the VAT to 18 percent in 2004 and, under favorable circumstances , to 16 percent in 2006. "If the economy enables us to lower the VAT to 15 percent, this will be fine", Shatalov emphasized.

The Senior Deputy Finance Minister also claimed that a bill on reforming the Single Social Tax submitted by Duma deputies would cause losses in the Russian budget of at least RUR270bn (nearly $8.85bn). Meanwhile, the adoption of the bill is expected to attract up to RUR35bn ($1.15bn) to the budget due to the legalization of wages and salaries.