Economic growth in Russia amounted to 7.3% in the first months of this year, President Vladimir Putin said at a session of the Legislators' Council.
"The growth of the population's real incomes is about 9%, approximately 9.9%," said the president.
The president also said that the administrative reform reduced the number of personnel at federal and regional government bodies by 42,000 people.
The central apparatus has been reduced by 2,103 people, he continued.
In his report, Mr. Putin added that the role of property and income taxes in the economy would increase.
"By transferring property and incomes taxes to the regions, the government expects the role of these taxes in the economy to grow," said the Russian president.
At the same time, he said that this was not all about the tax handover. There are also excise duties and taxes on medium and small production, the president said.
"With an understanding of what municipalities depend on, the authorities will stick to a relevant economic policy - the development of medium-size business," said the president.
It is important to pursue a correct policy and to look on the small and medium business not as drones but as a source of welfare for an entire region, Mr. Putin added.
He said that the government would soon decide on the liberalization of VAT reimbursements in investment activity.
"The sum of the reimbursed VAT will increase many-fold, though these amounts account for hundreds of billions of rubles already," the president said.
"According to the law, VAT reimbursement requires huge funds," he noted. "Unfortunately, despite all of the attempts, cheating has not been prevented in this sphere, which has turned into criminal business - VAT reimbursement, above all, in export and import operations."
It is unacceptable to engage in illegal activities and arbitrariness under the guise of caring for people's welfare, Vladimir Putin said.
"One of the speakers quoted Cicero as saying that people's welfare is the supreme law," Mr. Putin continued. Under the guise of this thesis, one can commit any illegal and arbitrary action they [the authorities] like.
"In the history of humanity and in our history, we have repeatedly come across such interpretation of this thesis. To protect society from such negative developments, ancient Rome worked out a set of other rules. One of them is very familiar to our lawyers: Dura lex, sed lex [the law is harsh but it is the law].
"It means that good, correct and balanced laws and legal acts are beneficial for people."
Mr. Putin urged the Legislators' Council to work more actively on amendments to the laws considered by the State Duma.
The president also reminded the legislators that the government's recommendations on the Tax Code had been adopted today but that there might be more amendments coming.
"If you have any suggestions, voice them," Mr. Putin said.
He also stressed that the work on the Budget Code was to be completed in August. "Undoubtedly, this is a key to all the problems dealing with delimitation of power," he said.
The Federation Council may gather for the meeting on October 4 to consider new laws on the accession of new territories to Russia after the referenda