"It is quite pointless to appeal to each other, 'Don't let's steal.' People will be stealing, all the same, even if we cut value added tax rates to 13 or even 6 per cent," Mr. Gref said to the governmental Council for Competitiveness and Enterprise as it was discussing, at today's session, steps to reduce the fiscal burden.
"If we see there's no more stealing, that will mean we are no longer in Russia but in some other country," said the minister. As he sees it, swindling will go on with VAT reimbursement in domestic and transnational deals alike, even if VAT rates go down.
"It's up to us to stop it. We are not to take the thing for granted," replied the Prime Minister. "The words 'Russia' and 'theft' are not to go together-it isn't quite polite. We are dealing with responsible people and a responsible business, and we expect to get things into order."
Mr. Fradkov offered statistics on the share of VAT in fiscal revenues for particular industries. It makes 42.1 per cent of the total in metal procession and engineering, 38.7 per cent in transport, 17.2 per cent in fuel industry, and 3 per cent in iron-and-steel industry. "That is something to ponder on," he remarked.
Fiscal administration needs streamlining. VAT rates are to go down simultaneously. Both matters are staying on the agenda. They "do not imply whatever coercion", reassured the Premier.
What he meant was a way to reimburse tax revenues that will shrink as both goals are met. There is the Stabilization Fund to draw on, and ways to improve tax collection proceeding from the Tax Code. "The cabinet is willing to provide every opportunity, and work to strike the target," said Mikhail Fradkov.
