MOSCOW (Pakistan Point News / Sputnik - 10th February, 2021) The International Monetary Fund (IMF) on Tuesday praised Russia's growth-friendly tax reforms, such as the permanent reduction of the payroll taxes for small and medium enterprises, while also commending Moscow's "sizable response" to the pandemic-induced crisis.
Mostly annually, the IMF conducts Article IV consultations with member states in order to assess financial and economic developments in a country.
"[IMF] Directors commended the authorities for a sizeable response to the crisis which should help put a floor on the downturn and limit scarring ... Directors commended the authorities for growth-friendly tax reforms, such as the permanent reduction of the payroll tax for SMEs, and for better targeting of social assistance spending," the report read.
The fund also welcomed the loosening of Russia's monetary policy last year as well the introduction of new liquidity instruments, but underlined that some measures are required in order to improve the country's economic climate.
"[IMF officials] underscored the continued need to reduce the footprint of the state, improve the business climate, increase competition, address governance shortcomings and take steps to reduce the regulatory burden. Directors emphasized that the national projects be used as an opportunity to tackle structural bottlenecks," the report read.
The Russian economy is projected to grow by 3 percent this year following a contraction of 3.6 percent in 2020 due to the COVID-19 crisis, according to the IMF.
