08/05/1998 15:08:27 FOCUS-Russia PM urges Duma to hold special session
By Gareth Jones
MOSCOW, Aug 5 (Reuters) - Prime Minister Sergei Kiriyenko urged the
Communist-dominated lower house of parliament on Wednesday to interrupt its
summer recess to debate more laws aimed at pulling Russia out of its deep
The Communist speaker of the State Duma, Gennady Seleznyov, told reporters
after his talks with Kiriyenko that the chamber would probably reconvene on
August 19 to 20.
The Duma is not due to hold its next regular session until September 21 but
Kiriyenko needs parliamentary backing to push through income tax reforms, a new
bankruptcy plan and other changes to help keep his anti-crisis programme on
The government and President Boris Yeltsin have introduced some anti-crisis
measures by decree but under the post-Soviet constitution only parliament can
change or impose taxes.
In a move intended to bolster Kiriyenko's three-month-old government, the
World Bank said on Tuesday it was likely to approve a $1.5 billion loan to
Russia later this week.
The loan is part of an overall $22.5 billion bailout package agreed by the
International Monetary Fund and Kiriyenko's team last month. The package hinges
on progress in implementing the socially painful anti-crisis programme.
Also on a guardedly optimistic note, the State Tax Service said it expected
to collect 12.5 billion roubles ($2 billion) in taxes in August, modestly up
from 12 billion in July.
Russia's poor tax collection is at the centre of its non-payments crisis.
The government can not pay its bills. Firms can not pay the government, or each
other, or their employees, many of whom have not received wages in months.
Kiriyenko, 36, drove home the message that taxes must be paid in an
interview for the popular daily Moskovsky Komsomolets published on Wednesday.
But he also conceded that Russia's complex and cumbersome fiscal system had
encouraged rampant tax dodging, especially among the newly emerging class of
"We have to be sensible. Tax rates that are too high are pointless, because
we force people to find ways to avoid them. And there are plenty of methods to
do so. The tax rates have to be reasonable, so that it isn't worth the risk,"
"I got into a fight with Gazprom <GAZPq.L>," he said, referring to Russia's
biggest firm and the world's largest producer of natural gas.
"The result has just come out: Gazprom has fully paid its taxes for July,
and the government has fully paid up for its current use of gas," Kiriyenko
On Wednesday, First Deputy Property Minister Alexander Braverman said
foreign investors would be allowed to take part in the planned sale of a five
percent stake in Gazprom. He said the terms of the sale would be announced by
the end of the week.
The extra cash will be most welcome for the government as it struggles to
pay off wage arrears to millions of increasingly impatient public sector
Russian companies have lost millions of dollars in recent months because
angry miners protesting against unpaid wages have imposed blockades on key
railway lines, especially in Siberia.
On Wednesday a group of miners continued to block a railway line to the main
power station on the Pacific island of Sakhalin despite the danger of a complete
The island has had to switch to an emergency regime of 14-hour daily
blackouts, causing much of the annual peak haul of fresh salmon and caviar to
Losses from the two-week old Sakhalin blockade have already reached 1.5
billion roubles, RIA news agency reported. But local authorities said they would
not use force to remove the miners.
Several hundred miners have been picketing the government's headquarters in
Moscow for nearly two months, demanding prompt payment of their wages and
This week, however, the 67-year-old president has had something else on his
mind -- his own fishing.
On holiday with his family in the Valdai lakeland northwest of Moscow,
Yeltsin has been demonstrating his angling skills.
"On yesterday's fishing expedition Boris Yeltsin caught more perch than
anybody else. This proves he is on good physical form," Itar-Tass news agency
quoted the governor of Novgorod, Mikhail Prusak, as saying on Wednesday. He did
not say how many fish Yeltsin had caught.