Decrease in payments for state purchases does not compensate for drop in insurance contributions- Kudrin
MOSCOW. April 5 (Interfax) - A decrease in payments on state purchases for the near future will no help in compensating for a proposed reduction in insurance contribution rates, Deputy Prime Minister and Finance Minister Alexei Kudrin said on Tuesday.
Russian President Dmitry Medvedev announced the need to reduce expenditures on state purchases by 15% during a recent meeting in Magnitogorsk. He also instructed the government to ready proposals for reducing the rates on insurance contributions (34% as of this year).
Kudrin said that an updated version of the law on state purchases is still not in effect, adding that there are not enough options for carrying out Medvedev's instructions.
"So far a state official can't improve the efficiency of tends through these instruments [the law]. We barely have enough administrative clout to request a decrease in the cost for goods," Kudrin said while talking at a conference at the Higher School of Economics in Moscow.
"Implementing this point will be quite difficult. At present, this can't be a reserve in full measure for reducing rates on insurance contributions since it will not be up and in force before 2012," Kudrin said, adding that "nonetheless, it is necessary to work in this area."