Road Users' Tax

The Moscow tax authorities have verbally confirmed to us that the road users' tax rate for wholesale companies should have been 2.5% from 4 March 1997, the date of change to the Federal Budget Law regardless of the Moscow legislation. An official letter is in process that confirms this issue plus advises that recalculation of taxes for the period of uncertainty is not allowable.

Payments for the replacement of mineral resources ('PRMR') / New Instruction

The new Instruction contains significant differences from the previous Instruction no.28 dated 30.09.94. The new Instruction provides more opportunities for enterprises to use PRMR funds and reduces the tax burden for enterprises depending upon the conditions of extraction. The most important changes are:

• Natural resource users who perform their activity under the terms and conditions of production sharing agreements are excluded as PRMR tax payers.
• The tax base is now the cost of the first product produced from raw materials on their extraction, which makes calculations easier.
• Enterprises enjoy an exemption from PRMR where exploration of the resource qualifies as difficult.

Instruction of the State Tax Service of the RF no. 44 of 31 December 1996

"On calculation of the payments for the replacement of mineral resources"

Inbound investment / CBR licensing

S. Dubinin, Head of the Central Bank of Russia (CBR), suggests that the CBR should decrease its control over currency operations connected with inbound investments in order to stimulate foreign investments, with the exception of investments into strategic branches of industry. According to Dubinin, the CBR should only control outbound currency flows. The CBR is planning to propose amendments to the current currency exchange regulations.

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For further information contact Alla Shaulina on tel: +7 503 232 5511 fax: +7 503 232 5522 or e-mail directly: Alla_Shaulina@ru.coopers.com or enter a text search 'Coopers & Lybrand' and 'Business Monitor'.

c.Business Monitor 1997 - +44 (0)171 820 7733