Russian 'Oligarchs' Pledge To Pay More Tax To Fight Poverty

by Tatiana Smolenska, Tax-News.com, Moscow

01 August 2003

In what is perceived by many to be an attempt to improve the image of big business in Russia in the wake of the Yukos probe (and just might not be wholly unrelated to the upcoming elections), a group of business leaders have pledged to redistribute some of their wealth in the form of higher taxes and charitable donations, a Reuters report stated this week.

Speaking after a meeting of the industrialists and entrepreneurs union in Moscow, the group's president, Arkady Volsky, said agreement had been reached amongst some of the country's wealthiest industrialists to assist President Putin's fight against poverty.

"I might be speaking a little prematurely about this, but we - big business - agreed to share with the state, especially on the level of overcoming poverty, the tasks set out by Putin," Volsky told reporters recently.

Though Volsky has not referred to any specific measures or recommendations, he has suggested raising tax on goods "with a high profit yield." Though it is unclear what exactly is meant by this, it has been interpreted by many observers as a tax on the energy sector, apt timing given the events surrounding Yukos.

The Yukos case has shaken Russia to its foundations and has sparked fears of a loss of confidence in the country's financial system and thrown fresh doubt on the shady deals undertaken during the privatisation process in the 1990s. Despite this, Putin seems unphased by recent events. "The position of the President is that privatisation will not be revised," confirmed an official to the foreign press last Tuesday.

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