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President Vladimir Putin sent the Federal Assembly and Government a message on the budget policy in 2003

June 1, 2002

In his budget message, President Putin summarised the main results of the budget policy in 2001 and in the start of 2002.

The document indicated that the federal budgets for 2000 and 2001 were executed and the budget for 2002 would have a surplus. The budget has a financial provision to ensure the undoubted fulfillment of debt commitments and to maintain macro-economic stability.

The message identified a number of basic problems that all branches of government are to focus on solving in 2002–2003.

It stressed that the budget policy should promote the growth of business activity, structural reforms and social stability.

The document pointed to the need to improve the quality of medium-term budget planning and provide the possibility for the Government to approve a pattern of budget spending for the next three years.

At the same time the Budget Code must clearly define the sector of state governance. On the other hand, the code must be so changed to ensure that the budgets of all levels take into full account the state (municipal) obligations and the amendments determining the legal status of the financial provision and mechanisms of forming and using its funds.

One of the primary objectives of the budget policy on revenues is to make fiscal accounting as convenient as possible for the taxpayer and tax authorities. It is necessary to make the required amendments to tax legislation no later than the first quarter of the year preceding the year when such amendments are made effective.

In 2003, it is necessary to complete major tax reform. The following chapters of the Tax Code must be adopted and put into effect starting from January 1, 2003: on the procedure for paying a state duty; on customs duties and fees; and on taxes and payments connected with the use of natural resources.

Among the principal areas where inter-budgetary relations can be improved, mention is made of completing the delimitation of spending obligations between the federal, regional and local authorities.

The need for the further improvement of treasury technologies is stressed.

June 1, 2002