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. Last Updated: 07/27/2016

Potanin's VIP Views

Russia's First Deputy Prime Minister for the Economy Vladimir Potanin, appearing before Russian entrepreneurs in the capital's VIP Club, shared his views on basic problems now being tackled by the economic block of the government's executive branch.

On the Budget: "Today it is already clear that this year's budget does not have any chances of fulfillment, and next [year's] budget is not ideal. We are striving to make it so that 1997 becomes a certain step in solving more long-term tasks. Thus, the Economics Ministry, attracting a wide circle of specialists, is now working on a medium-term program of economic development by the year 2000."

On Money Circulation: "Our task is to replace all possible 'surrogate' forms of money with real money. Some deficit in the country's money supply is unavoidable in conditions of financial stabilization. But experience from the first weeks of November showed that even an insignificant increase of the money supply quickly increases weekly inflation indicators by two times. Thus, we are not ready to increase the money supply and we will not do it."

On Tax Reform: "Today we have an incorrect taxation structure. The tax load on organizations must be reduced, and on people it must increase. [We] must reform the salary payment system: Raise [salaries] and take from it, correspondingly, a big tax. Income tax must reach at least 10 percent of total government revenue, like in Poland, and not 2.5 percent like we have now. Naturally, this must be accompanied by social reform and the reform of utilities. The last one should pay for itself.