PRESS: Russia may compile budget only for 2017, not for ‘17–‘19

MOSCOW, Aug 26 (PRIME) -- The Russian government may compile the budget only for 2017 instead of a planned 3-year budget as it has not made a key decision on future changes in taxes due to upcoming elections, business daily Vedomosti reported Friday citing three federal officials.

Previously, Prime Minister Dmitry Medvedev said that the 2016 budget may lose 1.5 trillion rubles of revenue. A government official told the business daily that 2017 revenue may fall even deeper making compiling the 2017 budget with the Finance Ministry’s deficit target of 3.2% impossible.

The budget also has to include decisions on taxes and the pension system, even if they are made after 2018, but the decisions have not been outlined yet and are unlikely to be made until the end of the year, another official told Vedomosti. A third official said that the elections are also an obstacle in planning as it is unclear what the new government will decide about budget revenues and spending.

A representative of the Finance Ministry said that no such discussion is going on, while Natalya Timakova, Medvedev’s spokeswoman, said that all meetings and documents regard only the 2017–2019 budget. But an official in the financial and economic bloc said that the issue was raised at meetings, but no official discussion is going on.

Natalya Orlova, chief economist at Alfa-Bank, said that such decisions of officials increase uncertainty, as the government tries to avoid unsettling questions on future taxation of individuals and companies through one-year planning. Everyone understands that changes have to happen, and the longer there are no changes the higher the uncertainty is, she said.

(64.9459 rubles – U.S. $1)

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