“Foreign direct investment totaled around $30 billion in 2006, but exceeded $40 billion in the first nine months of this year,” Shuvalov said. The Kremlin official assured investors that the Russian tax system would be “further simplified”, following the substantial reduction in the tax burden and abolishment of property tax that the country has seen in recent years. Shuvalov also said that a proposal to replace value-added tax with sales tax was currently being considered. Alternatively, VAT could be unified and substantially lowered.

Prime Minister Viktor Zubkov said early last week that Russia had so far accumulated foreign investment worth $178.5 billion, of which $60.3 billion came in the H1 of 2007, about three times the inflow during the same period of 2006. Zubkov said investment in fixed capital from all funding sources exceeded $130 billion in January-August, up 22% year-on-year. He said half of all investment went to equipment and transportation. (rian.ru)