President Vladimir Putin said on Tuesday Russia needs to simplify its system of tax inspections, which analysts say is arbitrary and disruptive and has badly damaged the country's investment climate. Putin was speaking at a meeting where Deputy Prime Minister Alexander Zhukov, the man charged with bringing order to Russia's baffling tax system, laid out proposals for reform.
"I agree that procedures for tax inspections should be simplified and the inspections themselves should be made more orderly," Putin said in televised comments.
The choice of cabinet liberal Zhukov to handle the politically sensitive tax issue is being seen as a sign Putin might be prepared to clip the wings of the tax inspectorate.
But some cautioned proposals may only be for foreign consumption and might make little difference in practice.
The tax inspectorate played a key part in pushing oil firm Yukos to the brink of collapse, rattling Russian business leaders who fear they could face predatory inspections if they fall foul of the Kremlin.
Last year cellphone company Vimpelcom was also hit with a surprise claim of $158 million for 2001 - although fears that it might meet the same fate as Yukos receded when the bill was cut to $17.6 million.
"The package of measures ... allows us to improve the investment climate in Russia and strengthen relations of trust between business and the authorities," Zhukov said. He criticised current legislation as open to conflicting interpretation and said firms should not be subjected to repeated inspections.