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VAT rate to remain the same for at least three years

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MOSCOW, June 1 (RIA Novosti) - Finance Minister Alexei Kudrin is not giving up on cutting value-added tax (VAT).

"The idea still needs to be worked out, but we will implement it some day. I can confirm that," Kudrin told the Tax Reform: Analysis and Prospects conference of the Russian Union of Industrialists and Entrepreneurs.

But Kudrin said no decision had been made to reduce the tax in the next three years, adding that the quality of tax administration had to be reassessed.

"Today, I am putting the issue of tax administration first," Kudrin emphasized.

In his budget message to the parliament, President Vladimir Putin noted the necessity of reducing VAT and unifying it in the middle term.

"I believe that the problem of cutting the base rate of value-added tax and of its unification is topical as before," he said. "The administration of the value-added tax requires improvement."

Chief of the president's expert directorate Arkady Dvorkovich said the tax could either be reduced to 13% (from the current 18% or reduced to 15-16% with the abolition of existing benefits for a number of goods like basic foodstuffs, medicines, children's food and newspapers.

"There are diverse intermediate variants. This is a topic for another discussion," Dvorkovich said. "This task was set as a long-term task, which requires accomplishment.

Dvorkovich says it is necessary to unify the VAT rate. The now existing preferential rate of 10% leads to abuses, he said.

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