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The Ministry of Finance is turning back to the idea of issuing OFZ (federal loan bonds) for individuals as an alternative to bank deposits. The first issue (Rb 20bn) with an average annual yield of 8.5% is expected late in April.

At the regular meeting of the Board of Directors of the Central Bank of Russia held on March 24, 2017, a decision was taken to reduce the key interest rate by 0.25 p.p. to 9.75%.
The last time the Central Bank reduced the rate was in September 2016 when it fell from 10.5% to 10%.

The economic block of the government discusses the idea of returning the sales tax which can become an alternative to raising the VAT rate during the tax maneuver. In order to circumvent the decision of the Constitutional Court of the Russian Federation that rules out simultaneous introduction of two taxes with a similar tax base, the tax is called “trade duty” in the propositions.

One of the most pressing problems in the tax sphere discussed during the X Russian Business Week held in Moscow on 13–17 March were changes in the taxation of tax consolidated groups (TCG).

At present, it is particularly important for Russia to develop high-tech technologies to ensure import substitution and form long-term sources of economic growth. But how to determine in which regions there are more favorable conditions for development of high-tech industries?

Objective deterioration of oil production conditions requires using more sophisticated taxation instruments. The most effective form of taxation of oil production is the taxation of net profit which can be implemented by introducing a special excess profits tax with progressive tax rate determined by the level of project profitability.

In 2013–2014, the Government set a course for reforming the taxation of the oil industry, which the expert community conditionally called “tax maneuver.”

On 14 March, the head of Russian Ministry of Economic Development, Maksim Oreshkin, stated that the ruble exchange rate exceeds the fundamental values corresponding to the balance of payments of the Russian Federation, which contributes to the consumer price dynamics being slower than expected.

The peculiarity of Russia’s regional problems is due to the making of a new geopolitical space and a fundamentally new model of economic development.

The reform of supervising activities was long overdue in Russia, but the passport of the relevant priority program was approved only late in 2016. The program is aimed at the period till 2024 and implies radical reforms of control and supervising activities.

A new, the third in succession, Privatization Programme for 2017–2019 was adopted in late February. The Programme was drafted with due regard to the amendments in the spring of 2010 to the Privatization Act in force that extended (from 1 to 3 years) the effective period of the Forecast Plan (Programme) of Federal Property Privatization. It took longer than expected to draft the document which did not even exist earlier in the year, although the Federal Budget 2017–2019 was already adopted by then.

"Small tax maneuver" (or so-called fiscal devaluation) has been actively discussed in the economic block of the Government recently. The maneuver implies shifting the tax burden on business towards indirect taxes by raising the basic rate of VAT and reducing the profit tax rate or insurance premiums.

On Friday 3 February, Russia’s Ministry of Finance amplified its plans on purchasing foreign currency in the domestic forex market, specifying the terms and the maximum amount to be purchased. An official statement was made, in which the regulator plans to allocate another Rb 113.1bn of oil and gas federal budget revenues for the purpose.

One of the first decisions taken by Donald Trump after his inauguration on 20 January, 2017, was to sign the decree on the US withdrawal from the Trans-Pacific Partnership (TPP) trade agreement which united 12 member countries accounting for about 40% of the world GDP.

On January 19, Igor Shuvalov, First Deputy Prime Minister of the Russian Federation said that the Central Bank of Russia should buy foreign currency on the market to reduce volatility of the ruble caused by growing global prices on oil and ensure higher predictability of the exchange rate of the national currency.

The existing GDP dynamics trends which have been formed in the past few years do not give cause for optimism especially against the backdrop of quite an intensive economic development before the 2008-2009 crisis (GDP grew on average by 7% a year).