Andrey Sharonov Beats Deputies
At a meeting with representatives of Western companies organized by the American Chamber of Commerce in Russia on Tuesday, Deputy Minister of Economic Development and Trade Andrey Sharonov beckoned investors to special economic zones.
Jul 07, 2005
He said that the proposed law on them "will be passed on July 8 immediately on the second and third readings."
"Special zones will be created for those who want to come to Russia under preset conditions," Sharonov said frankly. He reminded his audience that deputies planned to amend the bill after its first reading. A clause in the legislation limiting the creation of the zones to sites where private infrastructure already exists caught the legislators' attention and they demanded additional tax benefits. Sharonov said that said that "the deputies gathered yesterday" and presented "200 pages of expected amendments," but there were also proposals where "the law tried to take control of specific enterprises." The final result, according to Sharonov, was that the deputies were convinced not to change the concept of the law ad not to increase benefits. Several clauses were changed, however. The area of the territory on which assembly production can be set up has been increased from 10 to 20 sq. km. Now, "within the special economic zone, at the moment of its foundation, there should be no objects belonging to private parties except the infrastructure, that is, communications lines, electricity, plumbing and roads." "There is hope that, on July 8, the law will be passed in its second and third readings," Sharonov said.
Sharonov also recounted that about 30 enquiries have been received by the government on the foundation of special economic zones and "regions are showing special interest in the foundation of technical inculcation zones [where innovative products could be developed and commercialized]." Sharonov mentioned only one assembly zone, the city of Elabuga, Tatarstan, for "a huge car plant." "All the governors will try to get a special economic zone," Sharonov said. "But we must not forget that it is an instrument for attracting investment and not for reviving unviable businesses, which every region has."
The government has not identified sources of financing doe the zones. Sharonov suggested that will be financed from a dedicated federal investment program or investment fund, but the volume of financing "has yet to be confirmed."
There was also a discussion of the Communications Ministry's intentions to set up technical parks. Communications Minister Leonid Reiman noted several times that the law on special economic zones does not meet the requirements of the IT industry. His ministry has prepared its own conception for the foundation of IT technical parks. Sharonov expressed skepticism about the Communications Ministry proposal. The main thing that the Economics Ministry is dissatisfied with in the proposal for technical parks is the desire of the Communications Ministry to "receive simplified taxation for the whole industry." Reiman told Kommersant that 80 percent of the structure of the prime cost of IT companies' production is salaries and "the burden of the unified tax system on them is disproportionately high. Therefore, measures are needed to support the whole industry." Reiman continued that his agency is still discussing the initiative with the Finance and Economics Ministries and Deputy Prime Minister Alexander Zhukov.
"Special zones will be created for those who want to come to Russia under preset conditions," Sharonov said frankly. He reminded his audience that deputies planned to amend the bill after its first reading. A clause in the legislation limiting the creation of the zones to sites where private infrastructure already exists caught the legislators' attention and they demanded additional tax benefits. Sharonov said that said that "the deputies gathered yesterday" and presented "200 pages of expected amendments," but there were also proposals where "the law tried to take control of specific enterprises." The final result, according to Sharonov, was that the deputies were convinced not to change the concept of the law ad not to increase benefits. Several clauses were changed, however. The area of the territory on which assembly production can be set up has been increased from 10 to 20 sq. km. Now, "within the special economic zone, at the moment of its foundation, there should be no objects belonging to private parties except the infrastructure, that is, communications lines, electricity, plumbing and roads." "There is hope that, on July 8, the law will be passed in its second and third readings," Sharonov said.
Sharonov also recounted that about 30 enquiries have been received by the government on the foundation of special economic zones and "regions are showing special interest in the foundation of technical inculcation zones [where innovative products could be developed and commercialized]." Sharonov mentioned only one assembly zone, the city of Elabuga, Tatarstan, for "a huge car plant." "All the governors will try to get a special economic zone," Sharonov said. "But we must not forget that it is an instrument for attracting investment and not for reviving unviable businesses, which every region has."
The government has not identified sources of financing doe the zones. Sharonov suggested that will be financed from a dedicated federal investment program or investment fund, but the volume of financing "has yet to be confirmed."
There was also a discussion of the Communications Ministry's intentions to set up technical parks. Communications Minister Leonid Reiman noted several times that the law on special economic zones does not meet the requirements of the IT industry. His ministry has prepared its own conception for the foundation of IT technical parks. Sharonov expressed skepticism about the Communications Ministry proposal. The main thing that the Economics Ministry is dissatisfied with in the proposal for technical parks is the desire of the Communications Ministry to "receive simplified taxation for the whole industry." Reiman told Kommersant that 80 percent of the structure of the prime cost of IT companies' production is salaries and "the burden of the unified tax system on them is disproportionately high. Therefore, measures are needed to support the whole industry." Reiman continued that his agency is still discussing the initiative with the Finance and Economics Ministries and Deputy Prime Minister Alexander Zhukov.