Monitoring of the Federal Legislation dated 26.12.2006

Uniform Recommendations on the Labour Remuneration System at the Federal, Regional and Local Levels for the Employees of Organisations Financed from Appropriate Budgets for the Year 2007 (Endorsed by the Decision of the Russian Trilateral Commission for Regulation of Social and Labour Relations of October 20, 2006, Protocol No. 9)

Regulation of labour remuneration of employees of budget-supported institutions is arranged on the basis of the tariff system of differentiation of earnings of employees of various categories including tariff rates, salaries (for the occupied position), tariff scale and tariff coefficients. Tariff systems of labour remuneration are introduced using the Joint Tariff and Qualification Guide of Jobs and Occupations, the Joint Qualification Guide of Positions of Heads, Specialists and Employees, as well as taking into account the state labour remuneration guarantees.

The bodies of state power of the subjects of the Russian Federation and the bodies of local government shall define independently the amounts and terms of labour remuneration of employees of their subordinate institutions. The amounts and terms of labour remuneration for the given employees may not be lower or worse as compared to the ones envisaged in the Labour Code of the Russian Federation, federal laws and other normative legal acts of the Russian Federation.

In 2007, the tariff system of labour remuneration in the budget-supported sphere will still be used on the basis of the Joint Tariff Guide while preserving 18 grades and the ratio of the first to the eighteenth grades of 1:4.5 and the inter-grade tariff coefficients.

New principles and approaches were formed to generate other systems of labour remuneration of employees of the state and municipal institutions in contrast to the Joint Tariff Guide. The new system of labour remuneration must increase already available level of labour remuneration, take account of the personal achievements in efficient management of the institution, envisage allocation of resources from entrepreneurial and other profitable activities to increase the labour remuneration fund of the institution. The basis of the new labour remuneration system for employees in the budget-supported sphere will be basic rates of labour remuneration specified by the Government of the Russian Federation according to professional qualification groups.

To solve the presidential task to increase within 3 years the real earnings of employees of budget-supported institutions at least 1.5 times, the federal budget for the year 2007 envisages resources to increase the earnings of the employees of budget-supported institutions from September 1, 2007. Additional measures are also envisaged to increase labour remuneration of employees of public health and educational institutions in the framework of implementation of priority national projects.

Letter of the Ministry of Finance of the Russian Federation No. 06-04-08/01-161 of December 15, 2006 "Methodology Recommendations on the Measures to Balance the Local Budgets"

One of the main principles of the budget system of the Russian Federation is the balance of budgets requiring that the volume of expenses envisaged in the budget must be in line with the total volume of incomes of the budget and receipts from sources of financing of its deficit.

The balance of local budgets is an important prerequisite for implementation of the authority of the bodies of local government to solve the issues of local significance.

The Methodology Recommendations have been worked out to form the program of measures to provide for the balancing of local budgets. The goal of the Methodology Recommendations is rendering methodology aid to the bodies of local government in the working out and implementation of the measures aimed at mobilisation of incomes and optimisation of budget expenses.

The measures of mobilisation of incomes of local budgets include: increasing receipts from local taxes; optimisation of the list of available benefits in the public interests; reduction of arrears in taxes and fees; attraction of additional non-tax incomes of local budgets.

The measures of optimisation of expenses of local budgets suggest: delimitation of expenditure obligations; drawing up and keeping of the register of expenditure obligations; introduction of the budgeting principle, assessment of efficiency of budget expenses; spending budget resources in the framework of inter-municipal cooperation; optimisation of budget expenses through arranging purchase contests for municipal needs; monitoring and control of expenses of the local budget.

A procedure of mobilisation of the sources of financing of the deficit of the local budget is envisaged.

Implementation of the recommended measures will permit to improve the quality of management of the budget process, activate the mechanisms of rehabilitation of municipal finances, create conditions for a stable execution of local budgets, improve the efficiency and results of work of the bodies of local government and other participants of the budget process, as well as reveal internal reserves to save expenses and increase incomes of local budgets.

To balance the local budgets, municipal formations are recommended to investigate and endorse by the decision of the local administration the mentioned program of measures. A model municipal legal act endorsing the mentioned program of measures is provided as an example.

Letter of the Department of the Tax and Customs Tariff Policy of the Ministry of Finance of the Russian Federation No. 03-11-04/3/515 of November 30, 2006

In the determination of the basic profitability value applied for the calculation of the uniform imputed incomes tax for individual types of activities, representative bodies of municipal formations may adjust (multiply) the basic profitability value by the correction coefficient K2. The values of the correction coefficient are determined for all categories of taxpayers for the calendar year and may have the amount of 0.005 to 1 inclusive.

The values of the correction coefficient may not apply in the subsequent year if they are fixed for one year only. In this case, the values of K2 equal to 1 shall apply. If the values are fixed without being restricted to the given calendar year, they will continue to apply.