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Russia: Change In Tax Code Considered During Budget Talks

Moscow, 31 October 1996 (RFE/RL) -- The Russian State Duma conciliation committee, set up to iron out disputes over the 1997 budget draft, today considered a government proposal to change the country's tax code.

Itar-tass says the commission members from both houses of Russia's parliament -- State Duma and Federation Council -- objected to part of the proposal that would rescind tax breaks to firms that made capital investments.

Russia's tax system has become the target of criticism. An international Monetary Fund (IMF) team monitoring Moscow's economic performance advised recently that the IMF not pay out the next installment of a $10 billion to Moscow, saying it had concerns over Russia's low tax collection.

Russian Finance Minister Alexander Livshits gave assurances yesterday that tax revenues would rise significantly in October. Livshits told the conciliation committee that the extra revenue would be of the order of two million million roubles.

The draft budget, as originally submitted, was rejected by the lower house of parliament for what deputies call its low social spending and over optimistic revenue projections.

Meanwhile, a top Russian official says the equivalent of more than $450 million in government money has been lost to bribery this year.

First Deputy Finance Minister Vladimir Petrov said investigations turned up large irregularities in money used by the Defense and Agriculture ministries

Interfax news agency quoted him as saying that the findings should be turned over to an emergency commission trying to help the Russian government cope with worsening budget problems.

Prime Minister Viktor Chernomyrdin has called for better oversight of spending and said the emergency commission "will clarify who has stolen (the money) and when."

Corruption is believed to be high in many Russian government's departments. The problem is aggravated by the government's inability to collect taxes. For the first nine months of the year, the government has received only 71 percent of the revenues it had expected.