The Ministry of Finance is not ready to give tax privileges for securities dealing, said Sergey Razgulin, Deputy Director of the Tax and Customs Tariff Department at the Ministry of Finance. According to him, the Ministry is not ready to widen the “current list of benefits, for instance, reduce the term of shares ownership from five years to twelve months, to exempt dividends from tax without no terms and conditions, which are rather favorable today, or refund the price of securities to individuals”, quotes Interfax.

This issue is still unresolved, and tax privileges will continue to be discussed in 2012. “the International Financial Centre development plan includes the revision of securities taxation, derivatives, dividends and interest payments”, Razgulin said.

Moreover, the Ministry of Finance is drafting proposals to cut a number of tax benefits. All present tax benefits are worth RUB 700 billion, of which more than RUB 100 billion are in property tax for the natural monopolies, RUB 100 billion – depreciation, RUB 170 billion – MRT “tax break”, and RUB 50 billion – lowered income tax”, the officer said. “Some of them will remain, others will be gradually lifted”, he said, pointing out that extra cash appearing as a result of this policy may be used either for introducing or reinforcing existing tax benefits, or for creating a safety net that won’t let excise and other consumption taxes grow if the macroeconomic situation goes downhill.

“The best tax benefit that can be brought back for private investors is no income tax within for three years-plus investments”, says Vadim Soskov, General Director of Capital Asset Management Company. This benefit was cancelled a couple of years ago, which had a dramatic effect on mutual funds’ shareholders and large private investors, who lost the incentive to invest long-term, he says. “In taking this stand, the Ministry of Finance contradicts the state policy, in particular, extending the investment horizon in our market”, Soskov says.

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