“I propose to introduce full amnesty for capitals returning to Russia. The full one. Let’s do it now, but once," Putin said.
Giving amnesty to money and capital returning to Russia “will give solid legal guarantees” to people with offshore assets.
“I am convinced that we need to completely shut down and turn the page from offshore in the history of our economy and our country." Putin said.
- Russian President Vladimir Putin delivers the annual Presidential Address to the Federal Assembly© Sputnik / Alexei Druzhinin
- Russian President Vladimir Putin delivers the annual Presidential Address to the Federal Assembly© Sputnik / Michael Klimentyev
- Vladimir Putin delivers annual Presidential Address to Federal Assembly© Sputnik / Michael Klimentyev
- Russian President Vladimir Putin delivers the annual Presidential Address to the Federal Assembly© AP Photo / Pavel Golovkin
- Russian President Vladimir Putin delivers the annual Presidential Address to the Federal Assembly at the Kremlin's St. George's Hall.© Sputnik / Grigoriy Sisoev
- Vladimir Putin delivers annual Presidential Address to Federal Assembly© Sputnik / Aleksey Nikolskyi
Russia’s leader also announced a four-year freeze in tax hikes and easing of administrative control over the nation’s businesses, aiming at providing a catalyst for the development of Russia’s entrepreneurship. Putin proposed a significant deregulation of Russia’s economy in order to spur growth in the country.
Putin's call for a total amnesty for offshore capital has the prospect of creating a significant influx into investment-starved Russia. Under the proposed amnesty, investors who move capital back in to Russia will be provided with guarantees of safety from criminal or administrative punishment.
Putin's proposal has the potential to solve some of the difficulties Russia's economy is facing making up for the lack of borrowing liquidity. Money repatriation can contribute to a stronger ruble and ease internal pressure on Russia's financial sector.
Putin stressed that, regardless of the political situation, Russia will be “open to the world”, by creating an atmosphere and system beneficial for foreign investment and joint ventures with international enterprises. He noted that the government’s main objective should be to stimulate private investment and provide people with new opportunities.
"We have a huge internal market and resources, capable intelligent people," he said.
Putin also offered government support to the nation’s banking sector by allocating money from Russia’s National Welfare Fund. He also promised state support to enterprises involved in non-commodity exports.
Oil and gas make up more than 50% of Russia’s budget income and roughly 65% of the nation’s exports. The recent decline in oil prices has had a significant negative impact of Russia’s financial sector. Coupled with the effects of international sanctions, estimated at $140 bln this year, they have created extremely unfavorable conditions for economic development.
Putin’s proposals hopefully will buoy investor’s trust in Russia and lay a solid foundation for short-to-medium-term improvement in Russia’s economy.