Support The Moscow Times!

Applying Judicial Experience in Legislation

The budget address of the President of the Russian Federation on budget policy in 2010-2012 appears to be a more open and business-like document than usual. It contains less rhetoric on “paternal care for the people” and displays instead more concern about the prospects of extricating the country from the current precarious situation: the serious risks of the continuing global economic crisis, a more severe decline in GDP than was previously forecast, a fall in real earnings, etc.

Against the backdrop of the continuing global economic crisis, the President of the Russian Federation no longer promises to stimulate businesses by cutting taxes. Instead we hear proposals, albeit expressed cautiously and vaguely, as to whether it is actually possible to reduce the tax burden to mitigate the adverse effect on the taxpayer of the increase in pension and medical insurance contributions.

At the same time, the goal of consolidating budget revenues was set clearly with the adoption of military terminology: additional revenues need to be mobilized.

Dynamic action is to be taken in a number of areas.

First, it is necessary to “implement state-of-the-art technologies in tax administration”. The Address does not provide any information on the parameters of such “state-of-the-art technology.” It should only be expected that even if the parties responsible for implementation do not disclose any details, they will soon let its presence be felt.

Second, business was called on to demonstrate “a high degree of responsibility when performing the obligation to pay taxes.”

The address notes that “deliberate tax evasion deprives society of the resources that are particularly needed in the current circumstances. For this reason such actions should be stopped ruthlessly.” It should be expected that the “state-of-the-art technologies in tax administration” will be used to increase the pressure on business, leveraging the threat that stringent measures could be imposed.

The authors of the address accorded particular attention to the fight against tax evasion schemes. They are assessed as “a risk to the stability of budget revenues.”

In this respect they have outlined plans to consolidate in legislation tools to counter abuses of law through tax minimisation schemes. It is indicated that the practical experience of the state arbitration courts should be leveraged here.

In other words, the address makes it clear that Resolution No. 53 of the Plenum of the Supreme Arbitration Court of the Russian Federation dated Oct. 12, 2006 on tax advantage has played its historic role and that the time has come to move on from the lawmaking activities of the state arbitration courts to a legal solution of the task of preventing aggressive tax planning.

Consequently, we should expect an increasing interest in the topic of legislative barriers to tax minimisation that will now become of a practical importance.

In these circumstances, the legislators will assume a serious burden of responsibility when passing new amendments to legislation. Meanwhile lawyers and experts are always ready to monitor and analyze everything pertaining to the development of draft laws intended to prevent abuse of legislation on taxes and levies.

Sign up for our free weekly newsletter

Our weekly newsletter contains a hand-picked selection of news, features, analysis and more from The Moscow Times. You will receive it in your mailbox every Friday. Never miss the latest news from Russia. Preview
Subscribers agree to the Privacy Policy

A Message from The Moscow Times:

Dear readers,

We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."

These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.

We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.

Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.

By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.

Once
Monthly
Annual
Continue
paiment methods
Not ready to support today?
Remind me later.

Read more