WWW.DISSERS.RU


...
    !

Pages:     || 2 | 3 | 4 | 5 |   ...   | 11 |
INSTITUTE FOR THE ECONOMY IN TRANSITION RUSSIAN ECONOMY: TRENDS AND PERSPECTIVES September 2006 MONTHLY BULLETIN Moscow 2006 Institute for the Economy in Transition, 1996.

5 Gazetny pereulok, Moscow 103918, Russian Federation Phone: (495) 203-88-16 Fax: (495) 202-42-24 E- Mail: todorov@iet.ru 1 Budgetary and Tax Policy....................................................................................................................... 3 Monetary Policy in the Russian Federation in August 2006................................................................. 10 Financial Markets.................................................................................................................................. 13 Investment in Real Sector of Economy................................................................................................. 21 Foreign Investments in Russian Economy............................................................................................ 25 Real Economy: Trends and Factors....................................................................................................... 30 Industrial Environment in Russia in September 2006........................................................................... 34 Foreign Trade........................................................................................................................................ 35 Reforming the Law on Local Self-Governance in the City of Moscow................................................ 38 Issues Discussed at the RF Government Meetings on September 7, 14, 21 and 28, 2006 ................ 40 A Review of the Russian economic laws issued in September 2006.................................................... 42 A review of Budget Legislation: September of 2006............................................................................ 44 2 Budgetary and Tax Policy According to the tentative performance of the budget in terms of revenues as of August 2006, the level of revenue of the RF federal budget made 24.29% of GDP; the expenditures accounted to 15.47% of GDP, budget surplus has come up to 8.82% of GDP. Within January - July of 2006 the RF consolidated budget revenues made 36.5% of GDP, consolidated budget expenditures made 25.4% of GDP, and consolidated budget surplus accounted to 11.2% of GDP. As of September 1, 2006 the volume of financial reserves of the RF Stabilization Fund made RUR 1 730.64 billion (13.3 % of GDP, whereas on August 1 of the current year it has reached RUR 2,207.33 64 billion (12.3 % of GDP).

The State of the Federal Budget According to the tentative estimates of the federal budget execution on cash basis, made by the RF Ministry of Finance, the federal budget was executed in terms of revenue in the amount of RUR 018.7 billion (24.29% of GDP), in terms of expenditures in the amount of RUR 2 560.12 billion (15.47% of GDP). The budget surplus made RUR 1458.58 billion (8.82% of GDP). It should be noted that the amount of revenues of the federal budget within January-August of 2006 in absolute terms was significantly higher than the respective indicator of the relevant period of 2005 (RUR 3 236.billion); nevertheless, some decline was registered in the relevant period with regard to GDP (24.94% of GDP in 2005). The amount of federal budget expenditures throughout January-August 2006 has grown in nominal terms in comparison with the relevant period of the year 2005 (RUR 2 063.70 million); however, in relation to GDP it demonstrated a certain decline (RUR 15.9% of GDP in 2005). As to the federal budget surplus in January through August of the current year, in absolute terms it was also higher than the relevant indicator of 2005 (1,172.94 billion), whereas in relation to GDP it has declined (9.04% of GDP in 2005).

The amount of federal budget revenues in July through August 2006 made respectively the RUR 524.67 billion and RUR 562.28 billion, i.e. 22.45% and 23.26% of GDP for a month. Expenditures borne by the federal budget in July through August 2006 made respectively RUR 338.1 billion (14.46% of GDP) and RUR 351.62 billion (14.55% of GDP). The budget surplus made RUR 186.billion and 210.65 billion accordingly, i.e. 7.98% and 8.71% in relation to GDP. Therefore, basing on the results of August, an increase of revenue and expenditure of the federal budget in absolute terms can be registered with regard to preceding month as well as in relation to the monthly GDP. These circumstances determined an increase in the surplus of the federal budget, in the nominal terms and in terms of the share in GDP versus the respective indicators, registered in July of this year.

For the structure of revenues over the period under observation, see Table 1.

Table 1.

Amounts of Revenues to the RF Federal Budget (per cent of GDP in terms of cash basis execution) Execution on Cash basis August July 2006 August 2005 Taxes and other payments administered by the 13.56% 13.20% 13.05% Federal Tax Service Taxes and other payments administered by the 9.42% 9.41% 9.44% Federal Customs Service Receipts administered by the Federal Agency 0.21% 0.22% 0.27% for Management of Federal Property Revenues of the federal budget administered by 1.76% 1.58% 1.48% other federal structures Total revenues 24.94% 24.41% 24.24% As one can see in Table 1, in August of 2006 the structure of tax revenues as broken by individual sections did not practically change in comparison with the data registered in July and August of 2005.

Thus, the bulk of the tax revenues was associated with the taxes and other payments administered by the RF Federal Tax Service, their share in GDP made 13.05 %, as compared with 13.56 % of GDP registered in August of 2005 and 13.2 per cent of GDP in July of the current year. The revenues administered by the RF Federal Customs Service were somewhat higher than the respective indicators observed in August of the current year and has somewhat grown as to the respective period of the preceding year (by 0.21 per cent of GDP). Finally, the scope of expenses of the federal budget, administered by other federal authorities, has demonstrated some decrease in August of the current year versus the relevant indicators of the preceding year (1.76 per cent of GDP) and vs. July of the current year (0.22 per cent of GDP). As concerns the rest of the revenues of the RF federal budget administered by other federal structures, in August they have made 1.76 per cent of GDP, therefore, this amount has insignificantly decreased in comparison with the respective figures registered in the preceding year July of the current year (1.58 per cent of GDP).

For the preliminary data on the financing of the expenditures borne by the RF federal budget in January through August of 2005 and 2006 presented by the RF Ministry of Finance, see Table 2.

Table 2.

Amounts of Financing of the RF Federal Budget Expenditures (in per cent of GDP) Financing of Expenditures January-August January-July January-August 2005 2006 Federal issues 3.03% 2.87% 2.56% Including expenditures associated with the servicing of the public and municipal debt 1.47% 1.05% 0.90% National defense 3.16% 3.21% 2.89% National security and law enforcement 2.42% 2.64% 2.31% National Economy 1.17% 1.37% 1.26% Housing and public utilities 0.03% 0.26% 0.23% Environmental protection 0.03% 0.03% 0.03% Education 0.85% 0.92% 0.83% Culture, cinematography and mass media 0.24% 0.26% 0.23% Health care and sports 0.49% 0.72% 0.64% Social policy 0.98% 1.13% 0.97% Interbudgetary transfers 6.74% 7.59% 6.58% Total expenditures 19.14% 20.99% 18.55% It should be noted that in January through August of this year the share of financed expenditures of the federal budget in GDP made 18.55 per cent, what was significantly lower than the respective indicator registered in January through August of 2005 (19.14 per cent) and in January through July of the current year (20.99 per cent). Comparison of the structure of expenditures shows that in 2006, similarly to the figures registered a year ago, the largest amount of financing was allocated in the sphere of interbudgetary transfers (6.58 per cent of GDP as compared to 6.74 per cent of GDP in 2005). As concerns other most significant flows of expenditures, there were also respective differences. Thus, in January through August of 2006 the expenditures for federal issues made 2.56 per cent of GDP (3.per cent of GDP in 2005), including 0.9 per cent of GDP for the servicing of public and municipal debt (1.47 per cent of GDP in 2005); for national defense (2.89 per cent of GDP as compared with 3.16 per cent of GDP registered in 2005); housing and public utilities (0.23 per cent of GDP as compared to 0.03 per cent of GDP in 2005). As concerns other largest expenditure items, the differences were less significant. Thus, the expenditures on national security and law enforcement in January through August of this year made 2.31 per cent of GDP as compared to 2.42 per cent of GDP a year ago; for national economy expenditures made 1.26 per cent as compared to 1.17 per cent in 2005.

Other expenses throughout January-August 2006 totaled to 2.95 per cent of GDP as compared to 2.per cent of GDP in January through August 2005. As concerns the comparison of other expenditures made in January through July and throughout January-August 2006, one can see from the Table, that expenditures made in August were either decreased or remained at the level of the preceding month.

Table 3.

Execution of the RF Consolidated Budget in January through May of (in per cent of GDP) I II III IV V VI VII VIII IX X XI XII Taxes* 25.6% 24.4% 25.6% 27.4% 27.1% 26.0% 26.1% 25.7% 5.0% 5.0% 5.1% 25.2% Revenues 32.0% 30.3% 31.5% 33.4% 33.6% 32.2% 32.2% 31.6% 0.9% 0.8% 0.7% 31.1% Expenditures 20.7% 25.3% 27.7% 28.8% 28.8% 28.6% 28.7% 28.5% 8.2% 7.8% 7.9% 29.7% Deficit/ 11.3% 5.0% 3.8% 4.5% 4.7% 3.5% 3.6% 3.1%.7% 3.0% 2.8% 1,4% Surplus I II III IV V VI VII VIII IX X XI XII Taxes* 6.1% 21.8% 27.4% 27.4% 26.6% 27.2% 27.1% 26.4% 26.5% 26.9% 26.8% Revenues 30.6% 28.2% 29.8% 32.9% 32.9% 32.5% 33.1% 32.9% 31.9% 32.0% 32.3% 32.3% Expenditures 18.5% 22.8% 25.4% 27.3% 26.9% 27.0% 27.0% 26.9% 26.0% 25.9% 26.1% 27.8% Deficit/ 12,1% 5.4% 4.4% 5.6% 6.0% 5.5% 6.1% 6.0% 5.9% 6.1% 6.2% 4.5% Surplus I II III IV V VI VII VIII IX X XI XII Revenues 48.8% 40.3% 40.3% 40.8% 38.8% 38.2% 37.6% 37.0% 36.0% 35.9% 35.8% 36.1% Expenditures 22.2% 23.3% 24.9% 27.1% 26.5% 26.6% 26.7% 26.6% 27.2% 26.1% 25.9% 28.1% Deficit/ 10.0% 26.5% 17.0% 15.4% 13.7% 12.3% 11.6% 11.0% 10.5% 8.8% 9.8% 7.9% Surplus I II III IV V VI VII VIII IX X XI XII Revenues 36.2% 34.4% 37.9% 37.1% 37.2% 36.9% 36.5% Expenditures 17.6% 21.0% 24.2% 25.4% 24.7% 26.6% 25.4% Deficit/ 18.7% 13.4% 13.6% 11.7% 12.5% 10.3% 11.2% Surplus At the end of the first seven months of 2006, the revenues of the RF consolidated budget made 36.per cent of GDP as compared with 37.6 per cent of GDP, registered in the respective period of 2005.

The expenditures of the consolidated budget have reduced as compared with the respective indicator of 2005 and made 25.4 per cent of GDP (against 26.7 per cent of GDP). The surplus of consolidated budget in 2006 made 11.2 per cent of GDP, what is somewhat higher of the 2005 figure (11.0 per cent of GDP).

Therefore, in January through July of 2006, there was observed some decrease in the revenues of the RF consolidated budget, while the expenditures were significantly decreased in terms of their share in GDP in comparison with the respective figures of 2005, what caused some growth of the surplus of the consolidated budget. Besides, in September the RF Ministry of Finance has published the data of the RF enlarged government on the budget execution in January through July of 2006. In accordance with the presented indicators, the amount of revenues of the enlarged government for the period under review made 40.5 per cent of GDP, the expenditures made 28.8 per cent, whereas the surplus made 11.7 per cent of GDP.

As of September 1, 2006 the financial reserves of the RF Stabilization Fund made RUR 1,730.billion (13.3 % of GDP) as opposed to RUR 2,207.33 billion (12.3 per cent of GDP) on August 1 of the current year.

Major developments in the budgetary sphere.

In September the Ministry of Finance has announced that it is planned to finalize the work on amendments to the RF Tax Code provisions, related to transfer pricing issues. Sergey Shatalov, the Deputy Finance Minister, has informed that the draft legislation is being reviewed by the Government for nearly two years, but the issue is still acute, though the legislation still needs refinement. Thus, experience and tendencies of development of other countries, related to this problem, should be taken into consideration. He has also noted that by the end of the current year Ministry of Finance will complete the work on allocation of a separate field for VAT in payment orders. Besides, in 2007 the gov ernment can adopt a law, introducing the system of VAT taxpayers registration, starting from the year 2008. The basic purpose of such registration, according to the Public Officer, is exemption of a lot of companies, especially small ones, from VAT payment and registration for VAT purposes. Besides, the registration will significantly reduce the number of businesses, enjoying the right for tax deductions.

Currently there are 2 million of legal persons registered in the RF, a lot of them are supposed to be VAT payers, but they do not submit tax returns. S. Shatalov has also mentioned an issue of the unified social tax. According to his opinion, now Ministry of Finance is not ready to revise this tax rate. Nevertheless, he has admitted that in future payments made for obligatory pension insurance, and possibly also for obligatory medical insurance, will be made individually (rather than tax-related payments).

Review of the RF Federal Budget Draft for In August the RF government has presented a draft law On the RF Federal Budget for 2007.

Some comments on the revenues and expenditures of the budget and sources of financing of the federal budget deficit are presented below. The data on the amount of the RF federal budget revenues of 2006 and 2007 are shown in Table 4.

Table Key Indicators of the RF Budget Revenues for 2006 and 2006 - approved 2006 forecast for execu- 2007 - draft tion RUR, mln % of RUR, mln % of RUR, mln % of GDP GDP GDP Revenues 5 046 137.5 20.7 6 159 066.6 22.6 6 449 367.8 22.including:

Pages:     || 2 | 3 | 4 | 5 |   ...   | 11 |



2011 www.dissers.ru -

, .
, , , , 1-2 .