OREANDA-NEWS. August 20, 2010. Head of Karelia Andrei Nelidov has held a session of the Government of the republic devoted to results of economic development of the region in the first six months. Head of Karelia has paid special attention to the fact, that production volumes grow, but it influences incomes of the budget poorly. First of all, the situation when about 40% of treasury it is formed due to payments of one tax bearer – Karelsky Okatysh, Inc., does not suit Andrey Nelidov . "It's preposterous, – Head of Karelia said. – In fact, we also have other enterprises of the similar level. As an industrial region the republic is equipped substantially. Karelsky Okatysh pays, how about the others? If only they left at least a part of money in Karelia, we would have had a rich republic."

In the opinion of the governor, the main reason for which this huge 'financial potential' vanishes is that the enterprises sell production at cost price – to themselves – and then taxes are paid where the company was registred outside Karelia, for example, to offshore accounts.

As Andrey Nelidov has emphasized, many enterprises show losses or zero profit for years, however, none of them refuses lease of forest or land contracts. Moreover, competition for licenses and sites constantly grows. Hence, there's profit, but businessmen pay taxes outside Karelia.

"They operate within the framework of the law, but we're no aboriginals help people somewhere on Cayman Islands become more rich for food, – Head of Karelia declared. – I consider it unfair, and we should start our dialogue with business." Head of the republic has noted that what is at issue is a dialogue – constructive and the most correct, however, in the future the preference will be given to those investors who will pay taxes fairly there where they make their profit. "This source of money to refill the treasury is even greater than the federal budget," – Andrey Nelidov summarized.

Departments of the economic block are charged to analyse activity of the large enterprises which 'sustain losses' for years, but regularly keep the head above water and even carry out of social obligations. "If everything is just the way they show it, they are heroes and deserve a monument to be put to them, – Head of Karelia has declared. – If not, and we put up with it, the monument can be put to the Government – for incompetence."

Nevertheless, despite of obvious problems and defects, as a whole against the background of the last year results of economic activities in Karelia look rather decent. As the First Deputy Minister of Economic Development of Karelia Lev Shustov has informed, on rates of growth of volumes of industrial production Karelia is the thirrd best among regions of the Northwest Federal District. Profit of organizations and enterprises has grown 5.6-fold. The budget of Karelia received 10,9 billion roubles, that is 26% more, than in the period from January to March, 2009. Growth of average monthly wages has made 108.5%. Growth of investments into a fixed capital is provided. The volume of construction work has exceeded the last year's similar parameter 1.5 times. Negative dynamics of commodity circulation (102.3% to the similar period of the last year or 27,5 billion roubles) is overcome. Losses of the logging branch have decreased 2.5 times. By the decision of session of the Government republican authorities are charged to provide execution of the annual plan concerning involvement of investments at the rate of 20,6 billion roubles and creation of 1,500 workplaces. Also in Karelia there will be established a commission at the Head of Karelia for modernization and technological development of economy of the region. It is possible to illustrate necessity of this step with the fact that a number of wood-working enterprises of Karelia till now use equipment of the 1930s and produce goods which are in demand only in those markets where high quality is not required, for example, in Egypt.

Besides, the Government will formulate the basic directions of investment policy through 2015, and will appoint high-ranking officials to be personally responsible for implementation of key investment projects. Also assignments and recommendations concerning improvement of social and economic situation are prepared for departments and institutions of local government of the republic.