Izvestia

Medvedev to Open United Russia University

Next week, Russian Prime Minister Dmitry Medvedev, leader of the United Russia party, will open the United Russia University. He will address its first students at the Moscow city government building on Novy Arbat Street. The provisional date for the opening is March 27.

Andrei Isayev, Deputy General Secretary of the United Russia General Council, is expected to oversee the work of the new university.

The University of Civil Activists is intended to train specialists for the United Russia party. Olga Batalina, another deputy general secretary of the United Russia General Council, said the party was establishing its own education system, thereby showing that it plans to be active over the coming years.

She said non-party members and volunteers were free to attend classes at the university. Batalina also stressed that the university offered a system of different curricula.

Activists due to train at existing schools will receive supplementary education at Russian higher educational institutions. They will also attend seminars and training sessions supervised by leading party officials. Students will receive information about the current agenda and party objectives, and receive training for speaking at public events.

Gleb Pavlovsky, president of the Foundation for Effective Politics, said this university needed to be established if United Russia really wanted to change, because that is how Western parties train their specialists.

“But if the party wants to continue to sit around and do nothing, then it doesn't need a university. All it would need is a school for auxiliary staff. So far, there has been no movement inside the party,” Pavlovsky noted.

Political analyst Dmitry Orlov, a member of the United Russia Supreme Council, said the party wanted to create its own education system. He added that the world’s largest parties had such a system and that United Russia should be no exception. “Moreover, United Russia members are interested in promoting social mobility and the university is also designed to play its role in this respect,” Orlov stressed.

Vedomosti

Government to Confiscate Super Profits via Luxury Tax

The Finance and Economic Development ministries have “conceptually agreed” on a new property tax bill, which Vladimir Putin ordered to be enforced in 2014.

Only one tax deduction, equal to the cadastral value of 20 sq m of the property, will be established by the federal law for all taxpayers. Any other deductions or privileges will be up to regional authorities.

The regions are to begin levying the new tax in 2014 as soon as they are ready, a federal official said. But they are to complete the reform by 2018.Currently, the maximum residential property tax is 0.1%, several sources told Vedomosti. The recent cadastral evaluation of property in Moscow valued 1 sq m at around 160,000 rubles ($5,180). This suggests the owner of a 55 sq m apartment will pay 5,600 rubles ($180) a year.
The average property tax burden across Russia will also rise from 686 in 2011 to 1,466 rubles.

The bill also calls for a higher rate of 0.5% for landlords who own properties worth over 300 million rubles ($9.7 million). In addition, the government has ordered this bill to be reworked in such a way so as to prevent the “owners of luxury properties” from avoiding paying tax.

This requirement applies to properties over 1,000 sq m, which are clearly luxury properties even compared with 100 sq m Moscow apartments or out of town houses of 250 sq m, the source said. However, luxury properties account for no more than 0.1%-0.3% in the Moscow Region and they are practically non-existent in other parts of Russia, said Konstantin Popov, chairman of the board of the Incom Real Estate company.

To avoid taxation under the current laws, luxury properties are often registered with a legal entity, possibly a foreign company. Some are registered as resort hotels, a government official added. Therefore, the ministries will have to come up with an arrangement to guarantee the highest tax rate is applied to this kind of property, regardless of the form of ownership or other technicalities. He proposed a rate of 2%, which is close to the commercial property tax – 2.2% from its amortized book value. It should apply to all luxury properties, whether they are valued at $2 million or $20 million.

Luxury property owners are unlikely to try and reregister their properties as commercial property, said Dmitry Kostalgin, a partner at Taxadvisor. The tax authorities can easily check how the property is being used. Moreover, a 300 million ruble property will amortize by 6 million a year, which, if exposed, would mean tax evasion on a grand scale. The risk of prosecution would be too high, he said.

The move is political rather than economical, Popov added, because tax collection is unlikely to increase significantly. But it can mitigate the general discontent with the property tax rise, if people know the wealthy will be charged a higher rate.

Kommersant

Russian Officials Face Prosecution for Failure to Disclose Foreign Assets

Russian lawmakers and civil servants could face prosecution in addition to being fired for a failure to comply with the newly introduced ban on owning foreign property and bank accounts. Analysts believe the move is politically motivated.

The State Duma, the lower house of the Russian parliament, is considering two bills banning government officials, their spouses and underage children from owning bank accounts and assets outside Russia. The bill, which was sponsored by the president in February, calls for the sacking of those Duma deputies and appointed officials who refuse to get rid of their prohibited assets within three months of the law coming into force. The stricter bill, proposed by representatives of four parliamentary parties in 2012, calls for their prosecution and punishment, with huge fines and prison sentences of up to five years.

Both bills have been adopted in the first reading and will be considered as a package for the second reading in April. Deputy speaker Sergei Zheleznyak from the United Russia party, who helped write the bill, insists on keeping the prosecution option. “Let those who fail to comply with the new requirements leave government agencies or give up their parliamentary mandates, as required by the presidential bill,” he said. “But those who hide their foreign assets while keeping their posts ought to be prosecuted.”

On the other hand, deputies are ready to agree with the president and allow officials to keep property but change the declaration procedure. Officials who want to keep  property outside Russia will have to indicate the source of the income used to buy them.

Communist deputy Dmitry Novikov does not believe this will work. “Given that courts are not independent and their verdicts are determined by loyalty to the government,” the new requirements will only serve to apply political pressure, he said.

“Instead of controlling the executive bodies, the Duma seems to be giving them still more authority over the legislative branch,” said Kirill Petrov from the International Institute of Political Expertise, a Moscow based think tank.

The past few months have seen several high profile scandals. In September, Deputy Gennady Gudkov from A Just Russia was fired for his alleged involvement in business, something members of parliament are prohibited from doing. United Russia’s Alexei Knyshov was forced to leave parliament in October for the same reason. Last week, the Duma expelled Vladimir Pekhtin, who chaired the house ethics commission, after bloggers uncovered some property in Miami (which he claims is owned by his son).

Vladimir Putin wants to “purge the elite” and limit the independence of government officials, said Mikhail Vinogradov, president of the St. Petersburg Politics Fund. Prosecution for failure to observe the bans he imposed “fits with the logic of intimidating officials and making them dependent on the law-enforcement authorities,” he said. “The question is whether Russia will be able to find enough energetic people who want to join the civil service while putting up with such restrictions.”

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