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. Last Updated: 07/27/2016

Changes to State Fund Approved

Amendments to the Budget Code, including reforms to the stabilization fund, passed in a second reading in the State Duma on Wednesday, Interfax reported.

The new bill, which is widely expected to pass in its third reading Friday, will introduce three-year government budgets.

The Duma also approved the government's proposal to divide the stabilization fund, which will be abolished Feb. 1, 2008, into a reserve fund and a "fund for future generations."

The funds will accumulate state revenue from taxes on natural resources production and exports of oil and gas. The stabilization fund currently only derives income from levies on oil production and oil export revenue.

Before becoming law, the bill must also be approved by the Federation Council and the president.

The Central Bank may assume powers for the management of the reserve fund, and in collaboration with other dedicated financial institutions could handle the fund for future generations under contracts with the Finance Ministry, RIA-Novosti reported.

The Duma on Wednesday also rejected two bills to reintroduce progressive taxes on personal incomes.

The bills, which were proposed by the Communist Party and A Just Russia and failed to pass in a first reading, would have solved the problem of "the excessive degree of social division in society," A Just Russia Deputy Alexander Babakov said, Interfax reported.

The current rate of personal income tax is set at a flat 13 percent. The bill provided for a tax exemption for individuals with an annual income below 60,000 rubles ($2,300).

The Finance Ministry's press service said Wednesday that the budget surplus in the first quarter stood at $18.2 billion, down from $22.2 billion the same period last year.

The federal budget envisions a surplus of $57.87 billion for 2007.

Budget revenues in the first three months totaled $54 billion, while expenditure stood at $46 billion.