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. Last Updated: 07/27/2016

Panel Urges New Tax on Securities

Russian officials, desperate to rake in extra cash to meet promises to the International Monetary Fund, agreed Thursday to tax the lucrative domestic debt market next year.

But ministers and parliamentary deputies who make up a commission re-examining the government's 1997 budget draft revised downward plans for overall tax revenue, vetoing higher taxes on gasoline and keeping tax exemptions on some investment.

Economists said new taxes on securities might increase the government's borrowing costs.

"Yields will rise exactly by the volume of the tax," said an analyst at the Finance Ministry's economic expert group.

Low tax revenues are one of Russia's most acute economic problems. The government received only 74 percent of budgeted taxes in the first nine months of 1996, and the shortfall last month prompted the IMF for the second time to delay a monthly disbursement of its $10 billion loan to Russia.

Itar-Tass quoted First Deputy Finance Minister Vladimir Petrov as saying tax collection had improved in the second half of October, when the government collected 10.6 trillion rubles ($1.9 billion).

Tax revenue was 3 trillion rubles in the first half of the month, Petrov told a government meeting. He said he was sure Russia would get the next IMF disbursement by the end of this year.

IMF officials have made clear they are looking for solid evidence that tax collection has improved -- and that the improvement can be sustained -- before they decide to release the delayed cash.

The commission, including parliamentarians wary of current revenue forecasts, is trying to work out what to do next year.

Under Thursday's proposal, the State Duma, parliament's lower house, would be asked to impose new taxes on operations with government securities. Such operations are currently tax-exempt.

, and earlier this month the Duma rejected a planned 15 percent tax on government discount treasury bills, or GKOs.