Mr. Zhukov said rules of VAT administration should be simplified in the first place. In particular, the government will consider the taxation of advance payments, capital construction and VAT returns to exporters. “This requires additional discussion,” the Deputy Prime Minister added.

His proposals were discussed at a cabinet meeting on Thursday. Government officials agreed with Mr. Zhukov and approved in principle the proposed measures to simplify tax administration rules. The Finance Ministry was assigned to prepare the document in a 10-day time frame. According to the Deputy Prime Minister, the Justice Ministry will consider tougher punishments for tax evasion.

Mr. Zhukov also proposed expanding the powers of regional authorities. In his opinion, a number of additional powers should be delegated to regional administrations, together with the necessary funds.

Mr. Zhukov said these were “traditional powers of regional and local authorities that now belong to the federal government”. According to him, decisions that will be made at Thursday’s government meeting, will strengthen the “vertical of executive authorities”.

This bill was also approved by cabinet ministers. It will be submitted to the State Duma within the next three days.