The amendments may soon have a significant impact on finances of regional and local authorities, reads the release received by RIA Novosti on Friday.
The reform of inter-budget relations, which can influence credit capacity of Russian regional authorities, including 19 of them that have a Standard & Poor's rating, includes further changes in taxation in 2005 and expected stabilization this year, gradual solution to the problem of non-financed federal mandates, as well as transfer of certain decision-making powers to regions and their stabilization from 2005.
Besides, it includes several changes in the administrative-territorial structure that can influence autonomous areas within regions or creation of new municipalities and changing borders of the already existing ones on a local level.
"Imbalance between the income level and spheres of responsibilities that can appear because of the reform should be slightly alleviated by the economic growth and, consequently, increased tax base. The achieved transparency, stability and predictability of the system should outweigh the budget losses of Russian regions and municipalities," believes Boris Kopeikin, Standard & Poor's credit analyst.
The amendments will bring long-term stability to regional and local authorities, but can have a strong impact on their finances in the short-term period, the agency pointed out.
