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Friday, Jun 20, 2014

World

Putin blesses proposed law on tax evasion prosecution

Reuters | Friday, Jun 20, 2014

Russia's President Vladimir Putin attends a meeting in the Kremlin in Moscow, on June 20, 2014.

MOSCOW - President Vladimir Putin gave his blessing on Friday to a draft law that would allow Russian law enforcement agencies to bypass the tax authorities and prosecute suspected tax crimes.

The proposed law would reinstate powers taken away from federal investigators under Putin's more liberal predecessor, Dmitry Medvedev, and follow other moves which critics say strengthen the role of the police and security forces.

After Putin discussed the latest draft with Mikhail Mishustin, head of the Russian Tax Service, the Kremlin press service quoted him as saying: "Good, finish your proposal and we will ask the Duma (lower house of parliament) to support it." The law would revert to practices from before 2011 when a law was introduced stipulating that the prosecution of suspected tax offences could solely be based on documents provided by tax authorities under legislation on taxes and levies.

In November, Putin said the tax-related clauses of the law were ineffectual and pushed for stricter regulation. The new draft would allow legal authorities to open an investigation into allegations of tax evasion based on their own evidence.

The new proposal has been criticised by Medvedev who is now prime minister, the business community and former finance minister Alexei Kudrin, who described it as a step backwards.

Putin's opponents say he has used the Investigative Committee for political purposes because it has opened criminal cases against some of his biggest critics since protests began against him at the end of 2011. The Kremlin denies this.

Mishustin told Putin the proposed legislation had been softened to give suspected tax evaders a chance to "repent" and pay off their arrears. "If the taxpayer under investigation would be willing to pay the amount of taxes as well as the penalties and interest ... then he may avoid criminal prosecution," Mishustin told Putin.

The new version also obliges the Investigative Committee to coordinate with the tax authorities on the size of the tax debt owed by businessmen under investigation.

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