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Strategies & Market Trends : Investment in Russia and Eastern Europe -- Ignore unavailable to you. Want to Upgrade?

To: Rob Shilling who wrote (594)	9/1/1998 8:10:00 PM
From: Rob Shilling	Read Replies (1) \| Respond to of 1301

Good news for Russian stock holders from Russia Today: Chernomyrdin said the new government had to act tough and without mistakes. "The government has to work in a concrete, tough and comprehensive way...The limit for mistakes has been exhausted," he said. He also said the tax system had to be radically overhauled and proposed to lower profit tax to about 20 percent from the average of 30 percent now. "Without tax reform that would stimulate production we will not survive," RIA news agency quoted Chernomyrdin as saying, echoing demands by international financial institutions. He also ordered the Fuel and Energy and Finance ministries to prepare by Thursday proposals on oil excise tax cuts. "There can be no delays, especially where oil producers are concerned," Chernomyrdin was quoted as saying by Interfax. At least short term the math on LUKOY looks interesting. Assuming these changes go through, LUKOY would enjoy lower profit taxes, lower excise taxes and lower expenses (from ruble devaluation). Of course if the economy shrinks some more, LUKOY would lose some revenue and an increase in pay would be likely for workers (to compensate for lost buying power). But in general the oil companies would be poised for good profits.