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VimpelCom Facing Additional Tax Demand

by Tatiana Smolenskaya,, Moscow

20 December 2004

According to press reports, the Russian tax authorities are attempting to claim extra taxes from mobile telecommunications firm VimpelCom for the years 2002 and 2003, in addition to the US$158m already claimed in respect of 2001.

It was reported in the Russia Journal that company President, Valery Goldin, told a roundtable meeting on corporate governance in Russia that the authorities are trying to claim back taxes from the Impuls design bureau, through which VimpelCom transferred tax payments, and from VimpelCom itself.

Goldin stressed at the meeting that VimpelCom has used the same method to pay its taxes for a number of years and has won cases in three commercial courts. Experts have also confirmed that the firm has paid the correct taxes, he stated.

Goldin went on to warn that the government’s hard line on the issue of tax compliance could well begin to drive out foreign investors.

"If the interests of foreign investors are seriously impaired, this would be very unfavourable for Russia and its investment climate," he remarked.

Meanwhile, officials from the Finance Ministry and Economic Development and Trade Ministry are due in the coming days to discuss the previous $158 million claim for back taxes, fines and penalties on Russia’s second largest mobile phone operator.

German Gref, Economic Trade and Development Minster, is reportedly in favour of a new legal mechanism to protect firms against retrospective tax claims, in a bid to restore investor confidence in the Russian system.

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