Vedomosti
Ruling Tandem Prepares to Swap Places
Vladimir Putin and Dmitry Medvedev will hold separate meetings with the active members of United Russia before the ruling party’s convention and the planned change of party leader. Medvedev is likely to replace Putin in this capacity.
Putin will meet the leaders of the United Russia Duma faction, members of the party’s general council and supreme council on April 24, sources in United Russia and the People’s Front told Vedomosti. Medvedev, who led the party’s list during the parliamentary election, will meet with them on April 27. One source said it would be Putin’s last meeting with the party leadership: at the convention planned for late May, he will propose electing Medvedev in his place.
Several sources close to the leadership of the party confirmed that Medvedev will become the party’s new leader. One source said that Medvedev and Putin would swap their separate networks of regional reception offices.
The meetings with the United Russia leadership will focus on the post-election agenda, said Putin’s press secretary Dmitry Peskov. The time for battles is over, now is the time for creation. Peskov does not rule out that discussions may also touch on the preparations for the party convention, but said the issue of the party’s leader could only be decided at the convention.
A United Russia source said that Putin’s meeting with the party leadership will be similar to his recent meeting with People’s Front activists. The main goals of the tandem’s meetings are to announce that United Russia remains the fundamental force on which the country’s leadership will rely, to urge party members to continue working and to prepare for a major new project, said a source with close ties in the Kremlin. The date of the convention, penciled in for somewhere around May 26, will in all likelihood be announced at the April 24 meeting, said a United Russia source.
Russia needs a non-partisan president capable of working with all parties, given that more freedom has been given to Russia’s political forces, said a Kremlin source, whereas Medvedev as a member of United Russia will be able to propose initiatives for consideration by the State Duma. At the same time, Putin will retain control over the party, which will be closely monitored by the president’s Executive Office.
Political analyst Alexei Makarkin said that the leadership of United Russia is part of the compensation Medvedev will receive for giving up his place in the Kremlin to Putin. It is unclear whether he would have agreed to the swap under current conditions given that party candidates in the regions now prefer self-nomination. Despite the change of leader, the party will remain responsible for the situation in the country alongside the prime minister. Ideologically, Medvedev will most likely nudge the party to the right although it would be better to move to the left, to fill the niche which the People’s Front has been trying to occupy, Makarkin said.
Kommersant
Iron Curtain Translated Into Money
Russian officials are not dreaming of restoring the Iron Curtain, whatever ordinary Russians may think. They know better: they dream of modernizing and monetizing it.
Two different government agencies are working on two bills aimed at gaining profit from the people and capital crossing Russia’s borders.
One of the bills, being developed by the Federal Tax Service, is part of its long and fruitless fight with offshore companies. The bill requires the beneficiaries of companies registered in offshore jurisdictions to make themselves known and pay 9% tax on any money transfers to their offshore companies. Those who fail to disclose their interests and are caught will pay 20% instead.
Although this plan sounds intimidating, businesses do not seem unduly troubled by it. Practice shows that these rules can be easily broken by setting up a buffer company outside the offshore zone. “Similar rules which applied in Ukraine and Belarus have not led to a cut in offshore capital flows,” said Rustam Vakhitov from UFS Investment Company.
Developed countries are dealing with illegal capital flight by negotiating with the authorities of tax havens and offshore finance centers. Russia seems reluctant to wash its dirty linen in public and prefers keeping an eye on the information it wants or does not want disclosed, and on the offshore companies it wants or does not want caught.
The Transport Ministry is working on a bill aimed at generating a profit from people crossing the border. It has proposed levying a tax on flights to foreign destinations, which means that airline fares will rise by about 1,000 rubles ($33.90). This initiative is being offset by cancelling the VAT on domestic flights, to make domestic travel cheaper.
But analysts warn the initiative is both absurd and unfeasible. It is obvious that international flight prices will go up, but prices for domestic flights will not go down. Analysts say this arrangement is no more practicable than, for example, introducing a tax on caviar in the hope that buckwheat prices will fall.
Everybody knows that prices never go down, in Russia at any rate, unless directly cut by the government. Gasoline prices rise whether oil goes up or down; airline fares rise, whatever the weather.
It is clearly much more difficult to get a hold of money or property while it is inside the country; but capital crossing the border is real and immediately taxable. The Transport Ministry seems to be abiding by this principle with remarkable consistency.
This move will probably be more effective than trying to tax offshore business owners. Taxing all cross-border flights, both into and out of the country, will adjust the responsibilities of all Russians, including owners of offshore companies. Even those who do not want to disclose information about their offshore businesses, and even those who do not get caught, will be adding 1,000 rubles to the country’s coffers each time they cross its border.
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