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Anorak | Bribes are no longer tax deductible

Bribes are no longer tax deductible

by | 4th, September 2012

BRIBES are no longer tax deductible. This is a bit of a change :

“Expenses incurred while committing legal violations, including providing bribes or kickbacks, are not recognized for the purposes of tax assessment,” the Ministry said in a statement posted on its website. Any official paying bribes will therefore have to pay the standard 20pc income tax, according to Russia’s Vedomosti newspaper. The clarification is relevant for for Russian arms exporters and commodity companies that have assets in the Third World, the paper cited tax officials as saying.

A change in the law that is, not so much of a change in practice. For bribery is endemic in the Russian business world. You bribe for simply everything. As an example, one major mining company was recently found paying the US university fees of the son of the local police cheif. That’s just what you have to do to make sure that the coppers don’t stop every truck, every van, every car from the plant and “inspect” it.

But we shouldn’t be too superior about this. When I worked out there in the 90s I made contact with our own Inland Revenue. I had to make (we were a small business so they were small amounts) various payments to various people. Might be champagne and flowers for the (female) customs officer

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Posted: 4th, September 2012 | In: Money Comment | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink