Publication: Monitor Volume: 1 Issue: 77

The decision of the Russian finance ministry to reduce theproportion of funds that enterprises can retain for wages withoutbeing subject to tax from 30 percent to 5 percent will both increasetax collections but lead to a decrease in wages paid out, economistPavel Bunich told Vecherny klub August 15. As a resultof this step and because of increasing inflation, ever more Russianswill fall below the poverty line, he said. Bunich noted that incontrast to 1993-94 when the subsistence minimum set by the stateas a basis for determining welfare payments was growing in realterms, it has fallen 7 percent over the past six months and willcontinue to fall in the future. Meanwhile, Finansovye izvestiyareported August 15 that many firms are now subject to taxesgreater than 100 percent of their overall income, a pattern thatis forcing many of the businesses into the arms of organized crime.And the size of wage arrears to the population continues to grow:Russian firms now owe their workers back wages of more than 7.15trillion rubles, an 11 percent increase in July alone, Russianradio reported August 16. The Russian government did promise topay back wages to coal miners near Rostov to end a strike there,Segodnya reported August 17.

Harvest Estimates Lowered Again.