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. Last Updated: 07/27/2016

Yeltsin May Reconsider Food Import Taxes

President Boris Yeltsin plans to reconsider the government's decision to raise import tariffs on foodstuffs after publicly criticizing the move this weekend, his spokesman said Monday.


"The president will study all the documents regarding the tariffs," said Alexander Orfyonov, deputy head of the president's press service. "Then he will choose either to support the decision or to correct it."


The new tariff schedule, which took effect on March 15, sets a 15 percent customs duty on most imported foods and a 20 percent duty on imported sugar. Imported foodstuffs previously were not taxed.


Last week Yeltsin discussed the new tariffs with Prime Minister Viktor Chernomyrdin in Sochi, but no information on the discussion was revealed.


Yeltsin, however, made some comments on the issue on Sunday, before he left Sochi for Moscow.


"We agreed to resume the discussion, considering that the government has made a number of mistakes that need to be corrected," Tass quoted Yeltsin as saying.


Ever since they were introduced, the new tariffs have been a major point of contention in and out of the government.


A number of Russian officials, including Mayor Yury Luzhkov and St. Petersburg Mayor Anatoly Sobchak, have severely criticized the new tariffs, saying they will boost inflation and even lead to social unrest.


Russian candy producers held a news conference last week to voice their opposition to the 20 percent import duty on sugar. They said the sugar tax would push up the price of their products and force a 30 percent production decline.


An official with the Moscow Foreign Trade Department said Monday that the new tariffs would mean huge additional expenditures for the city, because the city would have to budget extra funds for all the 1994 import contracts that it signed last year.


But Alexander Shokhin, the newly appointed deputy prime minister in charge of the economy, last week gave the tariffs cautious backing, calling them a reasonable compromise between the interests of consumers and producers.


Shokhin said the new tariffs would encourage foreign investment in the Russian economy, because it would be more profitable for foreign companies to produce in Russia.


Russia's top agriculture officials have also backed the tariffs, saying they are necessary to protect domestic producers from foreign competition.