These eyes are opposite

Government members cannot agree on tax policy principles

In tax policy there are more unresolved questions than answers, participants of the extended board of the Ministry of Finance admitted. The Ministry of Finance, as it turned out, is dissatisfied with the work of fiscal officers from a subordinate department - the Federal Tax Service. The government, in turn, does not want to look at economic problems through the eyes of the Ministry of Finance, that is, only from the point of view of budgetary expediency.

“It is important to understand in tax policy how tax rates affect business,” Prime Minister Mikhail Fradkov said at the board meeting. This thesis is almost eight years old; over these years, hundreds of studies have been conducted on this topic at the request of the government and relevant departments, countless reports have been read and heard on the impact of taxes on the economy, and dozens of candidate and doctoral theses have been defended. The personalities in the ministerial chairs have also changed, but still, as the prime minister admits, the problem has not been solved. Although the Minister of Finance has repeatedly announced that tax reform in the country is “largely completed” and only a few steps remain.

The Ministry of Finance, according to Mikhail Fradkov, is the eyes of the government with which it should look at the problem of improving taxation. At the same time, he emphasized, “it would be a mistake if the government looks at the economy only through the eyes of tax specialists and accountants; attention must be paid to the laws of economic development.” The Ministry of Finance’s “no” is not equivalent to the government’s “no,” the prime minister explained. The allusion was obviously to endless disputes between departments over the concept of tax reform, including the sometimes obvious disobedience of Prime Minister Alexei Kudrin, who for a long time refused, for example, to calculate the consequences of reducing the VAT rate to 13%.

Lack of subordination also irritates Minister Alexei Kudrin. “Despite Mikhail Efimovich’s words that the tax service works well, we have a lot of complaints against it,” he said yesterday. “Thank you for the creation of internal audit units in the Federal Tax Service, for the fight against corruption in the ranks of tax officials, but something needs to be done with tax administration,” the Minister of Finance said emotionally from the podium. The work of the Federal Tax Service has not become transparent; every wrong step is examined under a microscope, against which the State Duma is preparing at least a dozen amendments to correct the situation,” he very aptly outlined the process of working on a package to improve administration. By the way, the head of the Federal Tax Service Anatoly Serdyukov did not appear at the board meeting at all.

Deputy Prime Minister Alexander Zhukov also agreed with the minister’s arguments. The IRS must shift its mentality from accusatory to equitable and fair, he said. The subsequent liberal-optimistic passage that such an attitude of the fiscal authorities will not lead to business paying less ended with a pessimistic discussion about the VAT problem. “The solution to the problem of VAT administration has not progressed significantly in two years, and this ulcer is not healing,” admitted the Deputy Prime Minister. With the timing, however, Mr. Zhukov cheated a little: the “ulcer” is almost five years old, and Mr. Zhukov himself, among others, also fought against it when he was the head of the budget committee of the State Duma. It seems that the tax reformers themselves have already forgotten how old the tax problems actually are.

Irina SKLYAROVA