Russia to apply tax increment financing for infrastructure concessions - PM
GORKY. Oct 21 (Interfax) - The Russian government plans to apply tax increment financing for infrastructure concessions, Prime Minister Dmitry Medvedev said at a Consultation Council on Foreign Investment meeting on Monday in Gorky.
"Another instrument is concession agreements, they have been sufficiently tested, but in applying this kind of agreement we will expand and of course improve law enforcement practices. We also plan to use a deferred payments mechanism, the so-called tax increment financing, where returns on private investment in infrastructure come from future tax payments generated from the use of the infrastructure created. I hope this will also enable more projects to be implemented," he said.
The PM also spoke about government-private partnership. "Such [infrastructure] projects can of course only be implemented by joining the efforts and resources of government and business. Perhaps in other countries this can be done solely through private investment, but taking into account the scale of our country, unfortunately, this occurs only in this more complex way," he said.
Government-private partnerships are a tested method that helps establish dialogue between the authorities and the entrepreneurs and develop common approaches to solutions.
"I would like to tell you that the State Duma is currently looking at a bill on the principles of state-private partnerships. It has already been passed in the first reading and soon will be in the final reading. I hope it will create the right terms for this type of business, so that risks between private entrepreneurs, on the one hand, and the government, on the other, can be correctly shared out," the prime minister said.