Russia’s upper house approves key economic reforms
Measures designed to lower the corporate tax burden and help exporters were passed by Russia's upper house of parliament last Friday (20 July). The reforms reduce profits tax from 35% to 24% and allow exporting companies to hold onto a larger proportion of their hard-currency revenues.
The Federation Council vote followed approval of the bills by the State Duma, the lower house, last week. President Vladimir Putin must now sign them before they can become law. It is hoped that the reforms will encourage both foreign direct investment and raise exports by making Russia a more attractive place to do business. Officials hope that the lower rate of tax will also encourage less people to hide income. At present, Russian exporters have to sell 75% of hard currency within seven days of payment, and this will be reduced to 50%. A further bill concerned tax on oil which simplifies the system and could reduce the burden of some producers.
Economic indicators were generally positive for the first half of 2001. Gross domestic product (GDP) rose by 5% while Inflation on consumer items fell to 0.6% in July. Unemployment stands at 0.8%, or 6.6 million.
