RUSSIAN DUMA TO EXAMINE TAX LAWS.

The Russian Duma will discuss a number of changes in the present tax laws. These modifications were proposed during meetings of the conciliatory commission, where representatives of the legislative and executive powers tried to reach a consensus on the 1997 Russian state budget. The revision of the tax laws is a necessary preliminary step to discussion of the revised draft state budget, which will debated by the Duma on December 6.

Russia’s deputy minister of finance, Sergei Shatalov, declared yesterday that significant changes will be introduced in the tax regime for individuals. Income from bank deposits with yields that exceed the refinancing rate of the Central Bank will be taxable. The government also intends to bring under control forms of tax avoidance, such as loans given in very favorable conditions and excessive insurance payments. Shatalov added that these changes are not a threat to ordinary Russians but to those who exploit loopholes to avoid paying taxes. Other proposals to be debated are the introduction of a 15 percent tax on income from any kind of securities, including state bonds, and the elimination of the advantage enjoyed by joint-stock companies of reducing taxable profits by setting aside reserves. A new 1.5 percent tax on hard currency cash purchases is likely to affect the so-called "shuttle trade", which is carried out by individuals in cash. The proposed tax reform package also includes a reduction of excise duties on oil — from 70 to 55 thousand rubles per ton. Shatalov warned that the new, lower tax will be applied only when the budget becomes law and that the current higher tax should be paid until that time. He said that modifications of the tax regime would allow the government to raise up to 30 billion rubles in additional revenue. (Interfax, December 3)

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