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Revenues other than from oil will be found ("Parliamentary Newspaper") The State Duma has started discussing the budget for 2009-2011. The budget has as curious a document attached to it – the Ministry of Finance`s long-term budget strategy up to the year 2023, which says that the epoch of high oil prices is coming to an end, and that in the long-term the Government will have to look for other sources of budget revenues generation. Even proposals to delay gambling facilities relocation to four gaming zones are appearing against this background. The Minister of Finance Alexey Kudrin has explained more than once what kind of problems the Russian budget and finance system will be facing within the following 10-15 years. Since 2000, the budget and finance system`s well-being has been mainly based on high oil prices. Actually, 40% of the Russian budget revenues have always depended on the oil industry. High oil prices made it possible to form the Stabilization Fund. And as of now the oil prices growth rate, according to the forecast by the Ministry of Economic Development, will be slowing down, eventually resulting in the reduction of consolidated budget revenues. Alexey Kudrin said it directly that “in any case throughout the period of 2009-2023 oil prices will be losing their influence on the budget revenues.” As a result, the consolidated budget expenditure will be reduced from 34.3% of GDP in 2010 to 31.9% in 2023. According to the Ministry of Finance`s calculations, the oil and gas transfer – the non-savable part of revenues which may be used for financing expenditure – may be covered at the expense of the present oil and gas revenues till 2014 only. In the following years the monies of the Reserve Fund and the Future Generations Fund will have to be spent to support this amount of the transfer. Under these conditions, the Future Generations Fund will have been exhausted by 2019, and the Reserve Fund – by 2030. And problems of the pension system under the demographic crisis circumstances will be growing. Eventually Alexey Kudrin does not think it impossible that after 2010 Russia may start borrowing abroad again. However, it will not solve the problem. Thereby it is not by chance that there the Government has been communicated to be considering gambling revenues, which the state must actually be deprived of from July 1st, 2009. Pursuant to the law “On state regulation of activities involved in gambling organization and arrangement and on amending some of the RF legislative acts”, by that time all gambling facilities will have to be relocated to four gaming zones: in Primorie, Kaliningrad and Altay region and on the Azov Sea coast. However, currently the gaming zones are not ready to host gaming business. Their construction has been evaluated to cost 727.5 billiom rubles, which is two times as expensive as Sochi Olympics will cost Russia. According to the plan, 80% of the amount must be contributed by investors, but they are not in a hurry. As a result, offers to extend the term of the gaming business relocation to the zones till 2012 and even till 2014 are not unsubstantiated. In February this year the head of the REMU Alexander Shokhin suggested that the concept of the gambling law should be reviewed for casinos to be allowed in hotels, provided that the industry is regulated more toughly. And in summer Alexander Popov, a deputy from “Edinaya Rossiya”, submitted to the State Duma a law draft on the extension of gaming business relocation. The regions have also started talking about the extension of the term. Primorie region is reluctant to part with gambling facilities as they annually generate up to 500 million rubles to the regional budget and employ 1500 people. It is obvious that gaming business alone will not save the Russian treasury. However, tax proceeds from gambling operations considerably replenish the budget. According to the data of the Federal Exchequer, gambling tax collections may preserve their last-year level of 31.5 billion rubles in 2008. Therefore it is no surprise that the Russian authorities will afford the delay of its relocation to the zones. Source: ("Parliamentary Newspaper"), # 061(2313), 03 October 2008 |  |  | 
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