Government has virtually repudiated its declaration about
the need to reduce the tax burden
The latest proposals of the Government contradict
significantly the positive changes in work on the Tax Code.
A tax revolution on personal incomes almost materialised,
but failed owing to the Government's indecisiveness. That
is how Alexei Mikhailov, member of the Budget Committee
of the Duma, deputy from the Yabloko faction, assesses the
revision of the government's previous position in introducing
a regressive scale for social payments.
Alexei Mikhailov stresses that the debate
around the introduction of a single social tax concealed
a proposal that is no less important (about the regressive
scale), which may influence considerably the collection
of social payments and withdrawal of the "black market"
economy. During the examination of the Tax Code in spring
2000 representatives from the Yabloko faction in the Budget
Committee (deputies of the Duma Mikhail Zadornov, Alexei
Mikhailov and member of the Expert Council of the Duma Sergei
Don) introduced a package of amendments to the Tax Code,
which envisaged introduction of a regressive scale for social
Alexei Mikhailov explains that this system
distributes the tax burden of the citizens in their payments
to social funds more or less commensurate to the level of
social welfare that they will receive. Yabloko’s proposal
encourages legalisation of the wage fund and liquidation
of the system of paying salaries “in envelopes” (Ed. undeclared
to the tax authorities).
The introduction of this scale is one of
the key proposals in the programme documents of the Yabloko
association at the first stage of the tax reform (see Yabloko’s
election programme and Grigory Yavlinsky’s programme in
the presidential election campaign “Breakthrough Strategy“).
The Committee supported Yabloko’s proposal,
prepared and adopted amendments to the scheme of payments
to social funds (Socstrakh - social insurance, Medstrakh
- health care insurance, and the Pension Fund) according
to the following scale:
- 20% at annual incomes from 100.000 to
300.000 roubles (Ed. approx. $3.500 and $10.500 respectively);
- 10% for annual incomes 300.000-600.000
roubles and 2% for annual incomes over 600.000 roubles.
The Government also at first agreed with
this scheme. However the day before examination of the issue
by the Duma (late on June 6) the Government proposed that
the Duma change its position with regards the regressive
scale and toughen restrictions for enterprises in application
of this scale.
Thus, Alexei Mikhailov thinks that the Government
has virtually repudiated its declarations about the need
to reduce the tax burden.
Grigory Yavlinsky on the visit of US President Bill Clinton
the State Duma
The main purpose of the visit of the President of the United
States to Moscow was to discuss issues related to the anti-missile
defence system. I think that these talks should be continued
with President Clinton until the elections in the US, and
then with the new President of the United States. I think
that Russia has an opportunity to formulate a clear and
comprehensible position here. This position can be summed
up as follows. We are ready to recognise that the United
States has the right to develop a tactical anti-missile
system that would protect the USA from terrorist attacks.
But the United States and NATO must also recognise that
Russia, as well as Europe in general, also needs such a
system. Secondly, such a system for Europe can be created
only with Russia-s participation. Russia must insist, provide
reasons and develop the direction which I would call the
creation of a Russian-European anti-missile defence system,
based on Russian high technologies. Corresponding negotiations
have been conducted for over 18 months already. I discussed
this with the former President of Russia and with Vladimir
Putin, as well as at the Security Council. I also had an
opportunity to discuss this with the leading politicians
of the United States. I think that this direction is the
most reasonable and could resolve a whole range of security
issues for Russia, contribute to the development of the
Russian military-industrial complex and create real pre-requisites
for the development of deep, effective security systems
between Russia and Europe, which would be very useful for
Russia. There are also some reasons that were provided by
Vladimir Putin, which were also mentioned in President Clinton-s
speech to the Duma today, which demonstrate that the negotiations
may be aimed at creating a Russian-European anti-missile
Question: Is there any interest in this
Grigory Yavlinsky: Europe is obviously
interested. All the meetings and contacts confirm that,
even though Russia-s proposal was somewhat unexpected for
Europe and taking into account that today Russia is having
a rough ride in its international policy, this is such an
important and essentially right idea that it might be supported
by Europe. The problem is that such negotiations are difficult
to conduct with the United States, as the United States
was initially interested in creating their own system, including
their system in Europe. They were even ready to create such
a system for Russia. But we are interested in the creation
of a real Russian-European anti-missile defence system based
on our technologies. In particular, everyone acknowledges
and recognises that the Russian designs C-300 and C-400
have better specifications and quality than the American
"Patriot". This means that one can achieve more using Russian
military technologies, than present American technologies.
Therefore, there is such an interest in Europe.
Question: Grigory Alexeevich, how do
you assess today-s speech by President Clinton to the Duma?
Was it a farewell for Russia from a President, whose term
comes to the end, or did President Clinton offer specific
proposals and should this meeting be analysed more seriously?
Grigory Yavlinsky: Basically the nature
of discrepancies in foreign policy issues between the republicans
and the democrats in the United States is determined more
by the election campaign than by actual content. Consequently,
in terms of basic principled positions, the ideas worded
today by the American President will be meaningful to the
next administration in the USA. Even if this is a republican
Ivanenko expects serious battles in the Duma during discussion
of the tax initiatives of the Government
Sergei Ivanenko expects serious battles
in the Duma during discussion of the tax initiatives of
the Government Deputy Chairman of the Yabloko faction Sergei
Ivanenko forecasts that voting on the tax initiatives of
the Government to be considered by the Duma on the second
reading on June 7 will be political by nature.
Ivanenko told journalists on June 6, 2000,
that the Yabloko faction "on the whole supports the course
towards an abrupt reduction in taxes and consequently is
ready to support the tax initiatives of the government referring
to the introduction of a single rate (13%) of the income
tax and the introduction of a uniform social tax.
At the same time Ivanenko stressed that,
to the best of his knowledge, the government does not hold
one single view on these issues. Therefore, he said that
the ?key decisions on the tax initiatives of the government,
which will influence voting results, will be adopted during
the meeting of the Duma on June 7.
According to Ivanenko, serious battles
should be expected here. In his opinion, the problem concerns
the path that is chosen for Russia here: "either we will
create a free market economy at least in terms of incomes
taxes or wage taxes, or we continue the course of strengthening
the system of bureaucracy and corruption and the ingrained
methods used to evade unreasonable taxation. Ivanenko also
said that the introduction of a uniform social tax is very
important in terms of economic development strategy. However,
he noted that it is necessary to create corresponding mechanisms,
which would preserve present achievements in the social
The introduction of this tax should not
lead to a deterioration of the the positions directly related
to the financing of kindergartens, holiday homes and provision
of aid to the workers.
Based on Interfax reports.
The Yabloko and SPS
factions to support in the second reading the adoption of
a 13% flat rate of income tax
The Yabloko faction
will vote for the 13% income tax rate - Part II of the RF
Tax Code (Chapter 24) - that is currently being considered
by the State Duma
Ivanenko to head the parliamentary commission responsible
for the legal issues of production sharing agreements (PSAs)
On June 7, 2000, the State Duma approved
deputy Chairman of the Yabloko faction Sergei Ivanenko as
Chairman of the parliamentary commission responsible for
the legal issues of subsoil usage under the terms of the
A corresponding Resolution of the Duma
was adopted by 252 votes to 100 votes, with one abstention.
Sergei Ivanenko proposed that deputy associations
submit their candidacies to the Commission by June 9.
The Duma declined the proposal of the co-ordinator
of the CPRF faction Sergei Reshulskiy who proposed the candidacy
of independent deputy Nikolai Ryzhkov as head of this commission.
This proposal was supported by only 157 deputies, with a
required quorum of 226 votes.
Based on Interfax reports.
Yabloko and SPS factions to support in the second reading
the adoption of a 13% flat rate of income tax
On June 7 the voting of the Yabloko and
Union of Right-Wing Forces (SPS) factions will be consolidated
for the adoption by the State Duma in the second reading
of a 13% flat rate of income tax.
Deputy Head of the Yabloko faction Sergei
Ivanenko and Deputy Head of the SPS faction Viktor Pokhmelkin
made this statement to journalists after the meeting of
the Co-ordination Council.
Ivanenko noted that the Yabloko faction
had decide to allow a free vote on the issue of a single
social tax. At the same time he stressed that “this was
for the first time in many years that the government had
adopted a proposal of the Yabloko faction that had been
suggested long ago at the time of the introduction of a
regressive tax scale to encourage people with high incomes
to pay taxes”.
According to Sergei Ivanenko, some members
of the faction think that it is necessary to legally establish
very serious guarantees in the social sphere. However, Ivanenko
assumes that most members of the faction will support a
uniform social tax. According to Pokhmelkin, the SPS faction
will conduct consolidated voting for the adoption of the
single social tax in the second reading. Both Pokhmelkin
and Ivanenko think that the tax reform proposed by the government
“makes common sense” and should therefore be supported by
Based on Interfax reports.
Sergei Ivanenko expects
serious battles in the Duma during discussion of the tax
initiatives of the Government
Yabloko faction will vote for the 13% income tax rate -
Part II of the RF Tax Code (Chapter 24) - that is currently
being considered by the State Duma