02 January 2004 12:07
Don`t put all your eggs in one basket, Russian finance minister warns
 From this year the 5-per-cent tax on sales was abolished and the VAT reduced from 20 to 18 per cent in Russia. How will these changes affect economic development? We asked Finance Minister Aleksey Kudrin to answer this question. But the interview started with another question which concerns all Russians: what is going to happen this year to the dollar and euro exchange rates, and how can citizens protect their savings?
- The rouble will be a good means of saving money, even more profitable than the dollar or the euro. Not all our citizens believe this but, to judge by the rates comparison - these are purely economic and financial indices, - the rouble will be even more profitable. Those who are still not used to keeping their money in roubles - though I can say that, as borne out by the statistics of last year, many Russians have more confidence in the rouble now - many will continue to keep their money in foreign currencies. At present keeping money in euros has become more popular. Well, this trend is absolutely justified. Like the dollar, the euro is becoming a similar reserve currency. In my view, those will win who will keep money in both - as they say, don't put all your eggs in one basket. The same applies here - the basket of currencies is the same basket, except one should keep money in three different baskets [i.e. dollars, euros and roubles].
And now the question which must be of interest to everyone, businessmen as well as ordinary Russians: the cut in taxes. VAT has been reduced. What will this bring to Russia as a whole, as well as to businessmen and ordinary citizens in the country?
- A cut in taxes always means creating more favourable conditions for business. So the reduction of VAT by 2 per cent means that R100bn will stay in the economy. This means that enterprises will be able to increase their current assets, raise salaries and invest their main capital in the equipment and the buildings of their enterprises. This means that we support economic growth and that this support is more substantial and healthier than support as a result of high oil prices. The oil prices might fall but this support will stay. Therefore we are creating stable growth and stable rates for the economy that will not go down in the next few years. This will also include, I repeat, an increase in salaries. Therefore working in Russia will become more profitable.
RTR Russia TV
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