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Russia needs clearer tax procedures - Ernst and Young report

MOSCOW, October 13 (RIA Novosti) - In a recent survey conducted by a leading auditing firm, Russian taxpayers said the government needed to reduce the number of tax audits and simplify tax declaration procedures.

In research conducted in Russia this year and published by Ernst and Young Thursday, the firm found growing concern among the business community over the slow pace of reforms and flaws in the tax system. Businessmen who participated in the survey were dissatisfied with the inconsistency of Russian authorities in implementing tax laws and noted the large number of tax audits and levying.

"The Russian authorities' new tendency to launch criminal proceedings against the heads of companies and their colleagues when they take tax planning measures is also of concern," the report said.

"Respondents consider the main problem of the Russian tax climate to be the tax administration, whereas investors generally hold a positive view of tax laws and the possibility of resolving disputes in court," the survey said.

More than 80% of respondents said that within the last three years they had been involved in disputes with tax authorities, most of which ended up in court and were ruled in favor of the respondents. The report concluded that tax authorities were taking too many cases to court.

"Fair hearings of tax cases in the Russian justice system is one of the real successes of tax reform," Pyotr Medvedev, a tax specialist for Ernst and Young in the CIS, said.

According to the research, foreign companies have a more negative view of the Russian tax system than Russian companies. Sixty-five percent of the international companies surveyed said tax laws were negatively affecting foreign investment, whereas 47% of Russians said this was not the case.

The general view of respondents was that the Russian government needs to improve tax laws to resolve ambiguities and contradictions. Many tax disputes could be avoided with clearer and more precise legal procedures, the report said.

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