Official website of the President of Russia

News   /

Mr. Putin and Mr. Kudrin also discussed the measures the government has planned to cover the budget revenue that will be lost as a result of the abolition of the sales tax. The government’s plan is that the federal budget will transfer part of its tax revenues to the regional budgets. The tax revenues in question will come from profits tax and alcohol excise duties. In regions where this revenue transfer turns out to be insufficient, the federal budget will make additional transfers.

Mr. Putin and Mr. Kudrin also spoke of military reform, which is due to begin on a large scale in 2004. The budget has allocated an additional 8.6 billion roubles for the planned reforms.

During the first year of reforms, the money will be spent on renovating barracks for contract servicemen. In the following years, additional budget money will go directly towards raising wages in the Armed Forces.