 RUSSIA IN FACTS |
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Moscow mayor slams government for abolishing sales tax
Abolishing the current 5-per-cent sales tax with effect January 2004 has resulted in a rise in prices in Moscow for
all sorts of goods, Moscow mayor Yuriy Luzhkov said at the meeting of the Moscow government today. He said that as a
result of abolishing the tax, the city budget has lost R22bn which was usually spent on implementing social programmes.
"Abolishing the tax was a mistake, and the state needs to analyse it seriously," Luzhkov said. He called on
the federal authorities to settle the matter with trading companies who had promised to reduce prices after the sales
tax is abolished, but never did so. Luzhkov recalled that last year [2003] Moscow authorities warned the Russian
government that abolishing the sales tax would not result in the drop in prices. "I am making an official statement
that the so-called respectable trading companies who spoke in favour of the abolition of the tax, have lied to the
president and the Ministry of Finance has believed them in order to implement some dubious parts of the economic reform,
" Luzhkov said.
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