It is not expedient to speed up the process of decreasing the tax burden at the cost of external loans, Finance Minister Alexey Kudrin declared at the fourth annual conference devoted to the economic situation and investment climate in Russia. Kudrin pointed out that foreign loans were 2-3 times more expensive for Russia than for other countries that had an investment rating. "That is why this way of cutting the tax burden will not suit us over the next 2-3 years", the minister said.
He stressed that the main sources for conducting tax reforms should be GDP growth, a drop in state expenses and redistribution of the tax burden between the raw material producing and processing industries. This will enable the government to decrease the single social tax by 5 percent in 2005 and the value-added tax from 20 to 15-17 percent in 2006, the minister added.