The proposal of the Ministry of Finance and the Ministry of Transport to cut the base rate of the transport tax in half has received the support of President Dmitry Medvedev and the government, Deputy Prime Minister and Minister of Finance Alexei Kudrin said at a briefing on July 27. Mr Kudrin added that the corresponding draft law will be approved by the government within the next two months and introduced in the State Duma in September.

According to Mr Kudrin, regional officials requested that they be given "final say on the transport tax rate." Currently, the federal government sets the base rate of the transport tax, which the regions can then raise or lower up to ten times over. The proposal, the deputy prime minister said, involves halving the base rate, while allowing regional officials to create their own, more flexible rates at the local level, taking into account factors such as car classifications and criteria for tax breaks. As a testimony to the flexibility principle, regions will also have the opportunity to rescind the tax on cars with engines under 150 hp, Mr Kudrin said.

However, the Ministry of Transport proposes maintaining the transport tax on vehicles with a carrying capacity exceeding 12 tons, Minister of Transport Igor Levitin said, adding that special fees are planned for this class of vehicle, including a fee for foreign motor carriers passing through Russia.

The Ministry of Transport plans to implement a large-scale road repair policy in the near future. According to Mr Levitin, up to 85% of federal roads will be brought up to code by 2015 with financing from the Federal Road Fund. Beginning in 2011, a total of 44.5 billion roubles will be allocated from the fund to provide cities and towns with populations of 125,000 or more with paved access roads, Mr Levitin said.