Good afternoon!
We have gathered here today to discuss the development of an important document that will be part of the budget for the next three years. The document we are going to discuss will be the first in a series that will serve as a basis for the new three-year plan.
We are developing a post-crisis model for governing the Russian economy. Here we face a number of challenges connected with the need to find new sources of growth, become less dependent on oil and gas and diversify the economy. These issues have been discussed by the business community, the president's modernisation committee and at governmental meetings, where we have discussed projects to develop the country's leading industries.
We must proceed from individual discussions to a general analysis of the tax system and of the possibilities for future development that the tax system provides. It is worth mentioning here that only the integrated development of all institutes of society and the economy can facilitate the diversification of the economy and improve the investment climate. Tax resolutions alone are not enough. We are often told that if we cannot improve the investment climate by other means, we should cut taxes so as to compensate for the failures of other government measures. This method is hardly effective, because we would have to relinquish very important sources of income and expenditures, which the ministries should be increasing at this stage.
This has become especially visible lately as we see new federal targeted programmes, as well as new proposals for increasing financing for the development of technology, building infrastructure and supporting innovation. It turns out that we are working towards two goals: we must both provide tax preferences to stimulate innovation and increase government spending that would also create the infrastructure for innovation. We must find a balance between these goals, which makes our job difficult.
This year, the schedule for preparing draft documents is similar to the one that was used for the Budget Code before the start of the financial crisis. Last year we submitted the budget to the State Duma by October 1, which was unusual. According to the present schedule, we should submit the budget before mid-August, but we may also instruct Tatyana Nesterenko to reconsider our possibilities, taking into account the uncertainties that may arise during the process of discussing the key documents in the State Duma, and then present the final proposals regarding the schedule. So if we decide to change it, we will have to submit the proposal to the government and the Parliament.
The tax system has already been tested during the crisis. The revenues of the country and government fell. Tax revenues to support increased government spending fell from 36% of GDP in 2005-2008, when we had a favourable environment, to 30% of GDP. So the incomes of the whole budget system, including the federal, local and municipal budgets, fell by 6% of GDP.
We set up our budget system in such a way as to protect the Russian constituent entities in periods of financial troubles. The federal budget bore the brunt of the crisis, mainly because of falling revenue from oil and gas. Thus the federal budget's tax revenues, which were 21.5% to 22% of GDP from 2005 to 2008, fell to 16.5% of GDP last year.
In this connection, we should consider our experience from the crisis when developing our middle-term tax policy. At the same time, we should view the tax system as a tool to speed up economic development.
To sum everything up, we should consider the tax system as a means for both ensuring budget stability and stimulating the economy. Today we will discuss new proposals that proved effective after the crisis. A large section of the tax policy will be devoted to these proposals. Let us discuss these issues. We do not expect that today's discussion will be final. We will continue discussing these proposals with the business community and in the State Duma. We are willing to hear out any proposals and find the balance I mentioned before: preserving the stability of the budget system and at the same time stimulating economic development.
Thank you very much.