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    PRIME MINISTER FRADKOV ON THE NEED FOR TAX REFORM

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    MOSCOW, April 8 (RIA Novosti). The Russian government's innovations in the tax sphere will allow redistributing the tax burden among various economic sectors and strengthening internal growth factors, Prime Minister Mikhail Fradkov said at the Thursday session of the cabinet.

    "In this way, we will fulfill the task of structural redistribution of the tax burden, which will ease the economic dependence of the country on the situation on world markets," he explained. The government plans to increase the tax burden on the raw materials sectors, above all mining (especially oil producing) ones, and to raise export duties and excise taxes. "We will thus collect an additional share of superprofits which exporters gain thanks to high prices on the world markets," said Fradkov.

    In his words, the increase in the tax burden on the raw materials sectors should partially compensate for the reduction of budgetary revenues owing to the planned reduction of the unified social tax from 36% to 26%. This will release for the economy about 280 bln rubles (about $10 bln), which "is a substantial sum left at the disposal of enterprises, which will use it for raising wages and for investments."

    In other words, the government aims at slashing the tax burden on the economy and in this way ensure higher economic growth rates, the Prime Minister explained. He said the government's tax innovations had been approved, in principle, by the president and deputies and businessmen have joined the efforts to draft a relevant law.

    "In fact, we have entered the stage of the so-called zero reading," Fradkov said, adding that this session of the cabinet was attended by State Duma deputies. "We have elaborated a proposal on reducing the number of commissions at the level of the federal government and on shifting them to the interdepartmental level." As of now, there are more than 200 government commissions.

    The Prime Minister recalled that one of the tasks of restructuring the government was to specify the functions and increase the responsibility of ministries.

    Fradkov said at the session that this year the government will increase allocations to investment projects in several regions, in particular in Ingushetia (a North Caucasian republic that borders on Chechnya), which have socio-economic problems.

    According to the premier, 500 mln rubles ($1 approximately equals 28.5 rubles) have been allocated and more allocations are envisaged for the investment projects in Ingushetia.

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