Kudrin's doctrine: No optimization! Everyone pays!

Petersburg liberals are toughening policies?

After the Minister of Economical Development German Gref, the vice-prime minister and Finance Minister Aleksey Kudrin joined the campaign against tax payment avoidance. Judging by his intentions, soon there will be no legal tax optimization ways in the Russian legislatures.

Yesterday German Gref suddenly accused the most active tax “optimizers”, on contrary to his liberal image, asking them simply “how long?!” After his speech, the Russian Ministry of Taxation issued announcement, claiming that using various mechanisms of tax burden optimization, YUKOS paid as much as 5bln American dollars less.

In comparison with accusations of Khodorkovsky and partners in stealing one billion, this looked absolutely unprecedented. Even George Bush during his discussion of international problems with Vladimir Putin asked whether we’re not being too tough. It must be that the Russian president cooled his colleague, explaining that even if we are being a bit too tough, it is nothing dangerous, as all remains within the law.

Kudrin’s speech today finally proved that all jokes are over. The state would not allow anyone to “optimize” themselves where money is involved.

As it has been in Russia since Gorbatchev, our officials make the most important announcements to the foreign media, not to native ITAR-TASS. Kudrin kept the tradition: his words were addressed to the British Financial Times. “I want to stop all breaches of taxation laws. The crimes has to be punished for”, told Aleksey Kudrin to a surprised journalist.

However, the very next phrase demonstrated that optimization’s end will probably not be Russia-wide. Kudrin suddenly talked about oil: “Oil is our main resource. We have gathered additional 5bln dollars in 2001 from this sector. Now one third of all tax gatherings is from oil, oil postproducts and gas”. But some Russian businessmen, he assures, acted like pure “wreckers”, trying to minimize the state’s oil dollars income. One of such “wreckers” is YUKOS of course. Kudrin called the company “a number one tax avoider”.

“They were very aggressive, looked for legal schemes for tax avoidance”, claimed the Finance Minister. And added that YUKOS is not the only oil company in Russia that let itself avoid taxes illegally. He reminded that LUKOil had serious problems the last year, and BASHNEFT still answers to the state.

Kudrin at the same time denied any rumors of political pretext in the YUKOS case.

It must be that the British journalist felt uncomfortable time after time. So, answering the question on why YUKOS head Khodorkovsky was not bailed out, the vice-prime minister said calmly: “He is not dangerous to society, but there is nothing unusual in his detention. Many people were held in prison for economical crimes for long time. One of them, an ex-assistant to the finance minister spent 18 months in “Lefortovo”. It is unbelievable that the journalist was satisfied with such an answer, but he should have understood that even if Kudrin’s assistant spent so long time in jail, then they will not make any concessions to some businessman.

In the comments to the interview, Financial Times reminded its readers that it is not Russian Prosecution Department initiated toughening of taxation policies. Aleksey Kudrin initiated the government campaign for it in 2000, when oil companies actively pursued “optimization” schemes. Financial Times says the campaign had “some success”. “Together with new climate of better political stability, rise in oil prices and policy of attracting investors and rising the market value of shares, some oil companies became more transparent and paid more taxes”, they quote RIA “Novosti”.

It is clear that in the current hot situation so-called “Petersburg liberals” have to change their image to more tough, so that they did not look weaker than “Petersburg chekists” in the eyes of masses. However, the truth is that tax bonuses are over. And it doesn’t matter in this case what was the true reason behind it. After all promises of tax reform and lowering tax burden (which Russian government fed businessmen with for long time), this pill tastes bitter not only to the oligarchs, but to wide masses of Russian businessmen.

Now it seems they can only cross themselves, as there leaves no opportunity to avoid taxes. And any attempts to do so would most probably be seen as “State treason”, punished accordingly. If even when all those various tax “optimization” schemes were legal the Russian entrepreneurs constantly cried that the tax burden is unbearable, how loud would their cry be now?

One of the worst scenarios: all Russian businessmen gather money for a state revolution. A more realistic one: like from Pandora box, a serious competitor to Putin will appear for coming elections. And a person in government known to everyone becomes the country’s new prime minister.

[at the photo: Aleksey Kudrin and German Gref]