The budget annually underpays exporters about a third of the value-added tax returned to them, the Ministry of Economic Development believes. German Gref's department proposes to correct the formula for calculating the amount of refundable VAT and the 2004 budget project so that next year exporters will receive 83 billion rubles more. The Ministry of Finance considers this idea unfeasible.

The Tax Code sets a zero VAT rate for exporters. Exporters first pay VAT and then wait for its reimbursement from the budget. Every year the budget returns more and more to exporters. According to the Accounts Chamber, in 1999 they were reimbursed 39.7 billion rubles, or 18.3% of the VAT amount credited to the budget at the end of the year, in 2000 - 107 billion rubles, and in 2001 - already 211.9 billion rubles (44.4%). In 2002, exporters were reimbursed 181.1 billion rubles (34%). The budget law for 2003 provides for the reimbursement of 240 billion rubles (more than a third of the planned tax receipts).

As a rule, tax officials have to reimburse exporters more than is stipulated by the budget law. The unpaid amount is carried over to the next year. According to the Ministry of Economic Development, the state has already accumulated a VAT debt of over 110 billion rubles to exporters. But tax officials are convinced that a significant portion of companies present export VAT for reimbursement unlawfully. In support of this, tax officials cite, for example, the fact that in 2001 exports fell by 3%, while VAT reimbursement increased by 56%.

The draft budget for 2004 provides for the reimbursement of export VAT in the amount of 251.5 billion rubles. The Ministry of Taxes and Duties calculates the amount that must be included in the budget for the return to exporters using the formula: the 20% VAT rate is multiplied by the expected annual value of exports minus the exporters' material costs. The share of material costs in the value of export products is taken as the average for all industries. For example, the draft budget for 2004 includes a material component of 39.5%.

"This figure is understated," says Mikhail Orlov, head of the tax policy department at the Ministry of Economic Development. "It is only beneficial to raw materials producers, whose costs do not exceed 25% of the export value, while for highly processed goods the material component reaches 90%. " In order to stimulate the export of highly processed goods, the Ministry of Economic Development proposes increasing the share of material costs in the MNS formula to at least 50%. "In this case, the amount of VAT to be reimbursed will increase by about a third," predicts Orlov. This means that 335.3 billion rubles will have to be returned from the 2004 budget, or 83.8 billion rubles more.

According to Orlov, Deputy Prime Minister Boris Aleshin has already instructed the Ministry of Taxes and Duties, the Ministry of Economic Development and the Ministry of Finance to prepare proposals for changing the methodology by early October. It was not possible to obtain comments from the Ministry of Taxes and Duties and the Ministry of Finance regarding the Deputy Prime Minister's instruction yesterday.

Ilya Trunin, an expert at the Institute of Economy in Transition, agrees that the methodology for forecasting the amount of VAT to be refunded needs to be improved. "The VAT accepted for refund on material costs depends not on the cost of exports, but on their actual volume," the expert explains.

And the scientific director of the Economic Expert Group, Evsey Gurvich, advises calculating the material component for each of the industries, and then, taking into account its share in the export structure, including it in the formula for calculating the amount of VAT refunded.

"Even if the government decides to revise the methodology, the Ministry of Economic Development will hardly be able to correct the draft budget," the Finance Ministry official believes. "By October, the budget law will have already passed its first reading in the Duma. After that, it will be too late to change the main parameters of the budget, especially if we are talking about increasing the expenditure side by 80 billion rubles."

The budget will save on exporters