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                                           Taxation in Russia


The Federal Tax
Service in Russia is a relatively new organization, but its role is becoming
very important because the private sector is developing fast. Taxation is the
most important factor in implementing economic reforms. The Russian Government
is trying to lower the tax burden and to simplify the tax system.

For example, the
government departed from the progressive income tax system and introduced a
flat income tax which individuals pay at a 13% rate irrespective of the income.
There are plans to reduce profit tax and VAT. The government is
going to eliminate some tax allowances and exemptions.