Watchdog to Abolish Taxes On Investors

Reuters

The country's financial markets watchdog plans to abolish taxes on income from investment in domestic securities for individuals and stock market participants, a document obtained by Reuters on Friday showed.

The draft strategy for the development of the country's stock markets to 2012, aimed at turning Moscow into a global financial center, includes proposals to abolish income tax for individual investors and profit tax for brokerages and investment banks.

The current rate of income tax for individuals is 13 percent, and the corporate profit tax is 24 percent.

The country's stock market is the world's 12th largest by total capitalization, currently at $1.35 trillion, but the number of freely floated stocks is small.

The document calls for legislation to facilitate issuance of asset-backed securities and derivatives, and for the adoption of a code of professional behavior to prevent insider trading.

The strategy sees stock market capitalization at 130 percent of gross domestic product in 2012, and at 140 percent of GDP by 2020 with an annual $125.4 billion of initial public offerings.

The document has yet to be approved by the government.

The Finance Ministry has so far opposed attempts to cut taxes, despite calls from both outgoing President Vladimir Putin and President-elect Dmitry Medvedev for new tax breaks.