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Russia: Government Plans Aggressive Tax Collection And Spending Cuts To Boost Revenues

Moscow, 23 June 1998 (RFE/RL) - Russian Prime Minister Sergei Kiriyenko warned today that criminal proceedings will be instituted against tax evaders, accounts will be frozen and property seized as the government launches an urgent campaign to boost revenue. Kiriyenko spoke during an expanded cabinet meeting in Moscow, during which he and President Boris Yeltsin unveiled the government's anti-crisis economic program.

The center-piece of the program is a reorganization of the tax system coupled with improved collection to help shrink the ballooning budget deficit. The package also aims to cut government spending by some 42 billion rubles ($6.8 billion), notably by slashing the number of civil servants. Other measures include a program of government support for Russian exports and debt rescheduling for industry.

The plan comes just as the Council of Europe released a report today calling Russia's non-payment of wages "astronomical." The report by the Assembly's Social Affairs Committee cites Russian government sources as estimating that in mid-1997 the total amount of unpaid wages reached about $9 billion.

The report said that by March of this year total wage indebtedness had increased by another six percent. It noted that in Moscow alone 400 enterprises have wage debts.

The government has ruled out any devaluation of the ruble and vowed to set a stable currency as a priority.

Yeltsin said the austerity package must be approved by parliament as soon as possible to restore confidence in Russia's economy. He warned deputies that the government will resort to unspecified measures if they fail to do so.

Also today, Russian Finance Minister Mikhail Zadornov said in Moscow that the government hopes to finish talks with the International Monetary Fund (IMF) on an emergency loan within two to three weeks.

An IMF team is currently in Moscow to discuss the issue.

The government is seeking an additional loan of $10-15 billion from the IMF to help it out of its recent financial crisis.