MOSCOW, August 11 (RIA Novosti commentator Peter Lavelle). A number of local media sources claim that both the tax service and Finance Ministry abandoned on July 1 the procedure of assigning precise tax collection quotas to territorial divisions. In place of set quotas, the authorities will now focus on 'indicative figures' based on budgets and other technical requirements.
While neither body has confirmed this change in procedure, if true it would be a clear indication that the authorities are responding to President Vladimir Putin's call in his April address to the Federal Assembly to end 'tax terrorism' and to improve relations between the state and big business.
The use of tax quotas partly explains the zealous behavior of the tax authorities over the past few years, with some companies repeatedly investigated and often going to court to settle tax disputes.
According to Alfa Bank's Thursday deck note for investors, "The lingering presence of any sort of tax collection indicator - even indicative - suggests that the authorities have yet to fully abandon their adversarial outlook toward business, which we feel will be key in ensuring longer-term growth in the form of greater corporate investment and reduced capital flight."
Nonetheless, if in fact this new tax collection is now in force, Russia's investment case should improve and lower political risk assessments.
