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Objective deterioration of oil production conditions requires using more sophisticated taxation instruments. The most effective form of taxation of oil production is the taxation of net profit which can be implemented by introducing a special excess profits tax with progressive tax rate determined by the level of project profitability.

In 2013–2014, the Government set a course for reforming the taxation of the oil industry, which the expert community conditionally called “tax maneuver.”

On 14 March, the head of Russian Ministry of Economic Development, Maksim Oreshkin, stated that the ruble exchange rate exceeds the fundamental values corresponding to the balance of payments of the Russian Federation, which contributes to the consumer price dynamics being slower than expected.

The peculiarity of Russia’s regional problems is due to the making of a new geopolitical space and a fundamentally new model of economic development.

The reform of supervising activities was long overdue in Russia, but the passport of the relevant priority program was approved only late in 2016. The program is aimed at the period till 2024 and implies radical reforms of control and supervising activities.

A new, the third in succession, Privatization Programme for 2017–2019 was adopted in late February. The Programme was drafted with due regard to the amendments in the spring of 2010 to the Privatization Act in force that extended (from 1 to 3 years) the effective period of the Forecast Plan (Programme) of Federal Property Privatization. It took longer than expected to draft the document which did not even exist earlier in the year, although the Federal Budget 2017–2019 was already adopted by then.

"Small tax maneuver" (or so-called fiscal devaluation) has been actively discussed in the economic block of the Government recently. The maneuver implies shifting the tax burden on business towards indirect taxes by raising the basic rate of VAT and reducing the profit tax rate or insurance premiums.

On Friday 3 February, Russia’s Ministry of Finance amplified its plans on purchasing foreign currency in the domestic forex market, specifying the terms and the maximum amount to be purchased. An official statement was made, in which the regulator plans to allocate another Rb 113.1bn of oil and gas federal budget revenues for the purpose.

One of the first decisions taken by Donald Trump after his inauguration on 20 January, 2017, was to sign the decree on the US withdrawal from the Trans-Pacific Partnership (TPP) trade agreement which united 12 member countries accounting for about 40% of the world GDP.

On January 19, Igor Shuvalov, First Deputy Prime Minister of the Russian Federation said that the Central Bank of Russia should buy foreign currency on the market to reduce volatility of the ruble caused by growing global prices on oil and ensure higher predictability of the exchange rate of the national currency.

The existing GDP dynamics trends which have been formed in the past few years do not give cause for optimism especially against the backdrop of quite an intensive economic development before the 2008-2009 crisis (GDP grew on average by 7% a year).

According to the Russian Interior Ministry estimates, the average price for cigarettes will rise next year up to 220 rubles per pack. The Ministry has calculated the new cost of cigarettes considering the rise of excise duties on tobacco products expected next year.

At the last meeting of the outgoing year, held on 13–14 December, the US Federal Reserve System decided to raise the federal funds rate by 0.25 p.p., to 0.5–0.75% per annum. In addition, the Federal Reserve System announced the possibility of further rate tripling in 2017, which was a surprise to many economic agents.

After the key interest rate was raised dramatically and urgently to 17% per annum in December 2014, two months later (on 2 February 2015) the Central Bank of Russia started to lower it quickly (by 1.0 p.p.-2 p.p) though the headline inflation kept speeding up. The maximum was attained in March 2015 when consumer prices rose by 16.9% against the respective period of the previous year; the only exception was the indicators of January-February 2002.

The dynamics of lending by the banking sector to the economy have entered the area of positive values. It is to be noted that in October both retail and corporates segments of the portfolio increased.

The Government does not plan to introduce a draft law on introduction of the so-called “social parasitism tax” till the end of 2016. According to Maxim Topilin, Head of the Ministry of Labor, the text of the draft law does not exist yet.