MOSCOW, December 29 (RIA Novosti)-The 2005 budget will run a surplus of more than 7-8%, Finance Minister Alexei Kudrin said Thursday.
"There will be a high surplus in 2005. It will exceed 7-8%," Kudrin said, addressing a government session.
The minister said the government must maintain a balanced approach to budget and spending reduction in relation to the GDP, saying the budget deficit should not exceed 3% of the GDP.
He also warned against the significant reduction of value-added tax (VAT).
"If we reduce the VAT to 13%, the budget deficit under [the current oil price] of $27 per barrel will be 2.2% of the GDP," he said.
Although with oil prices at $22-23 per barrel, the average price during the last decade, the deficit will exceed 3% with a 13% VAT, he said.
