V. Putin Sends Budgetary Message to Federal Assembly / News / News agency Inforos
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V. Putin Sends Budgetary Message to Federal Assembly

V. Putin Sends Budgetary Message to Federal Assembly
President Vladimir Putin has sent his budgetary message to Russia's Federal Assembly. The message has been drawn up in accordance with Article 170 of the Budgetary Code of the Russian Federation and contains the main guidelines and reference points of Russia's budgetary policy for 2007, as well as for medium-term planning.

The message says that, on the whole, the current budgetary policy answers the strategic objectives of Russia's economic development, raising the quality of life and ensuring the security of its citizens. However, it is noted that the task of reducing the level of inflation in 2005 and in the first months of 2006 has not been accomplished in full.

The main task of the budgetary policy for 2007, as well as for a medium-term period, is to consistently reduce the inflation rate. The Russian President emphasized that the accent in fighting the inflation should be shifted from suppressing the surges in the inflation rate to eliminating the causes of the persistent relatively high level of inflation.

The message says that the policy of accumulating the "windfall" budget revenues in the stabilization fund should be continued. But while doing that, a clear-cut distinction should be maintained between the resources assigned to minimize the negative consequences of a possible drop in oil prices (the reserve part of the stabilization fund) and the resources accumulated over and above the reserve ("future generations fund"). The volume of the reserve should be defined in percentage to the gross domestic product. The President also noted the necessity of heightening the role of medium-term financial planning.

V. Putin also stressed the necessity of assuring the transparency and efficiency of purchases for the state and municipal needs and the necessity of improving the management of state-owned property. He said that the privatization of state-owned and municipal property should not be done exclusively with a view to get a one-time gain, but should rather contribute to structural changes in the relevant sectors of economy. The message notes the necessity of swiftly solving, by legislative means, the question of cutting down the redemption price of land plots whereon private enterprises are located.

As for taxation policy, the President noted that it should proceed from the necessity of stimulating positive structural changes in economy, consistent reduction of overall taxation burden and qualitative improvement of taxation management.

The message suggests that a decision be made on zero taxation of newly-developed oilfields located in Eastern Siberia and on the continental shelf of the Russian Federation, as well as on setting step-down coefficients for taxation of exhausted deposits.

According to the President, development and approval of legislative acts should be finalized for setting forth the basics and procedures of mass valuation of realty in order to introduce, starting from 2009, a single local realty rate in place of the current land tenure and property taxes.

V. Putin noted that in formulating the medium-term financial plan for 2007-2009 and the draft federal budget for 2007, funds should be set aside for implementing the earlier decisions on raising the salaries of state employees and the money allowances of army and law enforcement personnel. A special attention should be paid, says the message, to raising the living standards of old-age pensioners. In particular, the amount of pensions should never be less than the minimum subsistence level.
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