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FAQ
Q. What is the procedure of passing the law on the republican budget? A. Federal tax legislation has changed greatly. Cancellation of the tax on enterprises' turnover in the current year has resulted in a drastic decrease in the budget income base of the republic. The value-added tax has been completely centralized in the federal budget since the beginning of 2001. In the context of the 2nd part of the Tax Code being introduced by stages, the tax on maintaining housing and the social and cultural sphere has been cancelled. As a result, the RK budgets' own income will make about 90 % of the received tax in 2000. Hence, the 2001 budget was formed below the 2000 budget level with regard to income. Of course, local government bodies of the republic adopted decisions on introducing a 5-% profit tax, which enabled them to compensate local budgets income by 182 mln. roubles. However, none of the local government bodies has submitted a proposal concerning an increase in the budget income in the context of economic growth of the territories. Besides, federal governing bodies transferred 15 % of the income tax to republican budgets, for the Federal Law "On veterans" to be realized. It should also be mentioned that the transfer and subventions from the Compensation Fund do not compensate the losses in income of the republican budget, although the Compensation Fund was formed in the federal budget in 2001, the funds of which are envisaged to be used to realize the two federal laws, "On state allowances to citizens having children" and "On social security for the disabled in the Russian Federation". The republic is supposed to receive 195 mln. roubles for these purposes. The fact that the structure of the republican and local budgets is being changed is also of importance, since the republican budget is being brought in conformity with the Budget Code of the RF. According to materials of the newspaper "Karelia" (No. 11, 30 January 2001), the interview with Irina Akhokas, Deputy Minister of Finance of the RK Q. How are these changes going to affect the republican and local budgets? A. Realization of the budget is going to be difficult due to these changes. A raise in budget workers' salaries by 20 % is stipulated in the context of limited financial resources, along with funds needed to deliver fuel to republican towns and districts and realization of the federal laws "On state allowances to citizens having children", "On social security for the disabled in the Russian Federation", "On veterans", and of the RK Law "On compulsory medical insurance of citizens being out of work". To render assistance to local government bodies of the towns and districts of the RK in solving life support problems, the government stipulated an increase in expenses for financial support to towns and districts (by a factor of 1.7, as compared to the year 2000). To bring legislation of the republic in conformity with the Budget Code of the RF, expenses for paying salaries to municipal institutions' workers as well as expenses for the mass media, whose founders are local government bodies, are going to be paid from local budgets with a support from the Government. At the same time, the republican budget stipulates a drastic cut off of expenses for other items. The republican budget's own expenses have been cut off most considerably. Realization of both local and the republican budgets is going to be very hard throughout the current year. According to materials of the newspaper "Karelia" (No. 11, 30 January 2001), the interview with Irina Akhokas, Deputy Minister of Finance of the RK Q. What goals does the Ministry of Finance of the RK set for the year 2001? A. The whole work is aimed at retaining the positive trends achieved in the year 2000, growth of economic indices, reducing the budget deficit in the complicated conditions of the current year. According to materials of the newspaper "Karelia" (No. 11, 30 January 2001), the interview with Irina Akhokas, Deputy Minister of Finance of the RK Q. What are the first-priority measures by the Ministry of Finance of Karelia with relation to the budget realization? A. First, formation and approval of the budget lists and limits of financing for each structure receiving funds from the republican budget. Next, adoption of the towns' and districts' budgets. It is necessary to submit in the first quarter the Programme of economy (optimization) of the state expenses to the Chairman of the Government. At what expense the republican budget deficit is planned to be reduced. Second, priorities in spending funds should be identified. These include timely payment of salaries, social payments, allowances and privileges. And the most important thing is to achieve an increase in the budget income, so as to avoid lowering of the rate of providing people with budgetary services in the republic. According to materials of the newspaper "Karelia" (No. 11, 30 January 2001), the interview with Irina Akhokas, Deputy Minister of Finance of the RK 
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