Taxation of Assistance
The “taxation of assistance” issue is a long-standing and increasingly burdensome obstacle to effective implementation of assistance from the perspective of most donors. G7 and other donors have spent considerable time and effort seeking exemptions from taxes and customs duties. Numerous bilateral efforts over the last two years and lengthy negotiations with the Ministry of Finance have not solved the problem. The tax and customs authorities of the Russian Federation are increasing attempts to collect taxes and duties. Interest in coordinated collective action has increased.
The G7 SIG office, in conjunction with the G7 Presidency, is coordinating and providing staff support for G7 collective action, at the Ambassadorial and working levels, on taxation of assistance. The G7 SIG office is working with State Duma Committees, the Ministry of Finance, and other agencies of the Russian Government in support of the adoption of effective legislation and streamlined implementation procedures.
There are a number of other administrative and bureaucratic obstacles to effective implementation relating to the lack of a clear overall legal, administrative framework for implementing technical and humanitarian assistance (visas, registration, accreditation, status of experts, advisors, etc.). The SIG office systematically collects and organizes implementation-related information, laying a basis for collective action on issues of common concern. It convened a Workshop on Implementation Problems to give donors an opportunity to share information, experience and contacts. The SIG office is compiling a reference guide to implementation problems and coordinating with other organizations interested in such a guide. The SIG office also continues to work on trying to streamline administrative procedures.