Russian govt actively working on budget expenditures, revising previous decisions while maintaining priorities - finance minister
MOSCOW. March 26 (Interfax) - The Russian government is working on balancing the federal budget for the current year and the upcoming three-year period, revising expenditures while maintaining its priorities, and is also focused on improving tax administration, Finance Minister Anton Siluanov said.
"Today, the main work of the government, and I think my colleagues will agree, is work with the budget, with balancing the budget, not only for the current year but also for the upcoming period. We are actively working on expenditures, I want to say right away, revising previous decisions. We have so-called 'zero-based budgeting' while maintaining priorities, primarily on technological sovereignty, and on a more targeted approach to the distribution of social assistance measures. This work is difficult but very important. Today, the government is deeply engaged in it," Siluanov said at the congress of the Russian Union of Industrialists and Entrepreneurs (RSPP).
In terms of budget revenues, the authorities are primarily focused on improving their administration, he said. "You know that we have prepared measures to formalize the economy; we see that there are still gray zones in certain sectors," he said.
"To ensure a balanced budget, primarily through work on expenditures. And second, through improving administration," he said.
There are currently no plans to increase revenues by raising taxes, according to Siluanov's response to a corresponding question from the head of the RSPP, Alexander Shokhin. "We carried out two changes to the tax system in previous years, and now we will focus on implementing these decisions that were adopted. We are monitoring the situation, how business is feeling. Today, the main task is improving administration," he said.
The goal is to create space for easing monetary policy through a balanced budget. "I am confident that this will work," Siluanov said.
"Monetary policy and fiscal policy are closely interconnected," he said, noting that without ensuring a balanced budget it is impossible to solve one of the main problems - reducing the cost of money. "A large deficit means, accordingly, less credit to the economy and higher rates in order to limit the money supply; everything is interconnected. The base rate, which is used when forming the budget and the oil price cut-off, affects operations in the foreign exchange market. Accordingly, this affects the exchange rate," he said.
"Therefore, market rates and the exchange rate are important components of business operations; they are of equal concern to both business and the Russian government, and the interests of business and the government in this area coincide. We want low inflation, we want low rates, we want a predictable, balanced exchange rate," he said.
