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"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.

In 2016, the Nobel Prize in the economics was awarded to the authors of the contract theory: Oliver Hart of the Harvard University and Bengt Holmstryom of the Massachusetts Institute of Technology. No doubt, these laureates deserve the prize as the outputs of their research are taught at all the universities within the frameworks of contract theory courses.

On Wednesday, 5 October 2016, the Kommersant daily published a number of provisions of the draft of the tax policy main measures in 2017-2019 period developed by the RF Ministry of Finance. According to the information provided by the newspaper, in the draft it is proposed to raise in 2017 the specific component of the excise on cigarettes from Rb 1,420 per 1000 cigarettes which provision is envisaged by the current version of Article 193 of the RF Tax Code to Rb 1,560 per 1000 cigarettes. Also, it is planned to maintain the rate of appreciation of tariffs on cigarettes at the level of 10% in 2018 and 2019, too.

The latest changes in the Russian regulation on undercapitalization¹ (namely, Article 269. 2-4 of the Tax Code of the Russian Federation) were introduced by Federal Law No.25-FZ of 15 February 2016 on “Amendment of Article 269 of Part 2 of the Tax Code of the RF as Regards Definition of Controlled Indebtedness” (hereinafter FL 25-FZ).

On Friday, 16 September, the Central Bank of Russia reduced the key rate by 50 b.p. to 10% per annum. So, the CBR has made a cautious step towards easing of the interest rate policy, having declared at the same time that it does not plan any further cuts in the interest rate till 2017.

In a letter addressed to the central bank, the Russian banking community has made a proposal that banks in some cases be allowed to request a credit check on customers without having to obtain their consent.

Introduction of new rules of calculation of the property tax on the basis of a cadastral value and not the BTI estimate may happen to be unfair.