Russian tax bodies for tougher individual income control

MOSCOW, July 28 (RIA Novosti) - Russia's taxation service said Friday it was set to lobby for a legal mechanism allowing it to apply to private financial institutions for information on the incomes of clients.

The Federal Taxation Service currently obtains such information from employers or the individuals in question but a spokesman said the service expected the new mechanism to help compare income records with data provided by other sources as a safeguard against tax evasion and manipulations of social and property-related tax deductions.

"We want to receive information from external sources, such as banks and non-state pension funds, insurance companies and registrars," the representative said.

The spokesman said inspections the service held could only affect companies and other legal entities, but their clients' activity could not be questioned and they could easily get away with offences. Therefore, the service called for amendments to be made to laws on banking, insurance, pensions and others that would authorize taxation bodies to make inquiries about income histories with these organizations.

Experts said under the scheme, tax bodies would have grounds to inspect the activity of applicants for tax breaks and would be able to assess additional taxes and fines to be claimed in court.

But Alexei Smironov, of the Konsultant Plus information and legal services network, cast doubt on the idea. He said none of the attempts made under similar schemes to date had been a success and inspections were not always cost-effective.

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