Russian Prime Minister Sergei Kirienko got an unusually sympathetic hearing from the opposition-dominated parliament yesterday when he presented the Duma with twenty-one new laws making up the government’s emergency austerity package. Kirienko said the aim of the new laws was to put Russia’s public finances on a firmer footing. They would also, he said, give production a chance to revive by shifting the main burden of taxation from producer to consumer. He urged the Duma to approve the laws before its summer recess on July 16. (RTR, NTV, July 1)
The Duma responded by adopting eight of the proposed bills including one reducing the tax on corporate profits from 35 to 30 percent. Parliament balked at only one measure: that under which a standard 20 percent rate of VAT would be levied on all eligible goods at the point of dispatch rather than at the point of sale. Deputies argued that 15 percent was the highest permissible rate. (Ekho Moskvy, July 1)
Kirienko charmed the deputies by telling them that rule by presidential decree was not feasible: The government realizes, he said, that it could not govern effectively without the support of parliament. “Taxes that are imposed by decree will simply not be paid,” he said. His conciliatory tone was welcomed by the Duma, as was his businesslike command of the facts and the detail with which he replied to questioning. Most of the Duma’s factions expressed cautious support for the measures, saying that, while they did not like the measures, the situation was so serious that they had no choice but to approve them. Only Grigory Yavlinsky said his Yabloko faction will not support them. (Itar-Tass, July 1)
IMF WARNS IT COULD RUN OUT OF MONEY.