Zee Beam News

June 6, 2005 RIA Novosti - Yukos case made oil giants pay taxes - experts say Moscow - Russia's oil giants began to pay taxes in the wake of the Yukos trial, said guests of the Vremena program on the ORT channel, discussing the consequences of the Yukos case and last week's sentence of Yukos senior managers. On May 31, the Meshchansky court of Moscow found the former Yukos CEO, Mikhail Khodorkovsky, and the MENATEP head, Platon Lebedev, guilty pursuant to six articles of the Criminal Code and sentenced them to nine years in prison each. Political scientist Vyacheslav Nikonov said tax collection had tripled in the past year. "Major oil corporations began to pay more. They gave up the loopholes [in the tax law] that they used before," political scientist Igor Bunin said. According to him, capital flight trebled and even quadrupled last year. "There are pluses and minuses," he concluded. Boris Titov, the chairman of the Delovaya Rossiya (Business Russia) limited company, pointed to positive business consequences of the Yukos case. He said it put an end to the era of "wild capitalism" in Russia. "Today business is reassessing its mechanisms. Today business understands better that taxes have to be paid, and not avoided by optimization schemes. Today business is different," Titov said. According to him, business has learnt the social lesson of Yukos. "Business now pays more attention to how society treats it as well as the authorities and the state," the entrepreneur said, adding that business had begun to develop social partnership with the state and civil society. Igor Bunin cited the Russian Public Opinion Center, saying that only 8% of the respondents found Khodorkovsky's sentence to be a blow to democracy, 29% saw it as bringing law and order, and the others remained indifferent. The experts said these results testified to people's negative attitude to oligarchs and entrepreneurs in general. As for the reaction the Khodorkovsky-Lebedev sentence caused in the West, experts asserted that Russia would not be excluded from the G8. "It does not depend on McCain or Lantos [a U.S. senator and a U.S. congressman who came out for excluding Russia from the G8]," Nikonov said. "It does not even depend on the U.S. administration. It depends on the G7 as a whole." He said the U.S. administration did not advocate Russia's isolation. Andranik Migranyan echoed him by saying that the U.S. needed Russia as a partner on many crucial issues, for example, Iran and North Korea. Alexander Shokhin, the chairman of the coordination council for Russian entrepreneurship unions, said it was not only business but also the state that learnt the Yukos lesson. "The state has realized that it can do nearly anything in the economic, political and other areas. And the main goal today is to use these opportunities," Shokhin said. "The state is faced with choosing the model of state and economic development. Hopefully, it will choose reforms, economic and democratic alike," he said.