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Duma fails to act, so Kiriyenko orders a hike in import taxes

SHARE Duma fails to act, so Kiriyenko orders a hike in import taxes

Frustrated by parliamentary resistance, Prime Minister Sergei Kiriyenko ordered higher import taxes Saturday in an effort to raise new revenue and win Russia a hefty new International Monetary Fund loan.

"Unfortunately, the parliament didn't pass all the necessary measures," Kiriyenko said on a visit to the city of Oryol, south of Moscow. "That means that we'll have to solve some of our problems . . . by decree."The State Duma, parliament's lower house, recessed for the summer Friday without passing several key elements of the gov-ern-ment's economic plan. The IMF has said it will not release the new loan money until a complete austerity plan is in place, especially new taxes.

Kiriyenko ordered a 3 percent increase in all import duties, which the government estimates will bring in another $160 million.

"This is a harsh measure which will entail a rise in prices for imported goods," Kiriyenko said. "But the government has been forced to take it to increase state revenues."

Raising import duties was one of the measures in the government's crisis management program that the IMF and other lenders wanted implemented before they start delivering $17 billion in new loans to Russia.

In addition, President Boris Yeltsin signed a decree Saturday to consolidate the government's holdings and control over the alcohol industry, whose taxes make a significant contribution to the federal budget.

Kiriyenko met with Yeltsin on Saturday to bring the president up to date on the government's austerity program before Yeltsin headed off on his summer vacation.

The Duma did pass some of the government's bills, including a key measure introducing an additional 5 percent sales tax, which was approved on Thursday. But the lawmakers rejected an income tax bill and a measure that would cut various social welfare payments for this year.

Communists and other hard-liners dominate the Duma and have balked at the government's spending cuts, saying they would further worsen the nation's social woes.