MOSCOW - Capital reptraited to Russia and declared under the terms of a planned tax amnesty will not be subject to special audit. Revenue services will hold their audit only if any signs of financing terrorism exist, Russian finance minister Alexey Kudrin has told journalists.

The Russian government plans to set simplified procedures for declaring personal incomes that were have not been reported before. Such incomes transferred to accounts at Russian banks from January 1 to July 1, 2006 will be exempt from all tax.

The finance minister refused to estimate a possible total amount that could be declared under the amnesty. "Other countries experience shows such estimates always differ from actual results," he commented. “There are no rules here, and everything will depend on how much general confidence business has in the government. I cannot give an independent appraisal to Russia's investment climate now,” Kudrin declared. However, the minister believes another upgrade of Russia's investment rating by the Fitch agency, growth in direct foreign investment and several other factors prove Russia is moving in the right direction.

On August 11, 2005 the Russian government will consider a bill on simplified procedures for declaring personal incomes that were not reported before. The document envisages payment of a flat one time 13 percent tax on declared funds and their transfer to Russian bank accounts.

As reported earlier, this decision is linked to the government’s intent to return capital to the country. Authorities are ready to turn a blind eye to some taxpayers who have not abided by tax laws in recent years. In his last address to the Federal Assembly President Vladimir Putin proposed such amnesty saying that it was necessary to return capital to Russia, to make it “work for our economy instead of ‘loafing around’ in offshore zones.” The proposal is most likely to concern individuals only.