"The Government virtually spoke against the development of education in Russia," Alexander Shishlov (the YABLOKO faction), Chairman of the State Duma Committee for Education and Science said on April 9, 2003, in a comment on the results of the voting in the Duma on draft laws envisaging tax breaks for educational institutions. Even though the State Duma Budget and Tax Committee had recommended on January 23, 2003 that the Duma adopt in the first reading the amendments to Articles 164 and 264 of the Tax Code submitted by deputies Alexander Shishlov, Mikhail Zadornov, Oleg Smolin, Valentina Ivanova and Sergei Shtorgin, only the YABLOKO faction, the Union of Right-Wing Forces (SPS), CPRF and Agrarians voted for the amendments. Their votes were insufficient for the adoption of the draft laws: 199 votes against the required 226.

Deputies proposed a reduction in the VAT rate from 20% to 10% for computer, audio and video educational and research materials (at present such a break applies only for books). According to Shishlov, reduction in the prices of educational materials would make it possible to apply more broadly modern information technologies in education.

The deputies also submitted to the Duma a legislative initiative aimed at developing secondary professional education. It was proposed to enable organisations to exclude from their tax base expenditures on the education of their workers in secondary professional education institutions. Such a norm could have attracted additional extra-budgetary funds to secondary professional education.

Finally, the third amendment would have made it possible for educational institutions to exclude from their taxe base expenditures on the purchase of fixed assets. This would have stimulated educational institutions to allocate revenues to development of the material base for education.

During the discussion in the Duma the government representative rejected categorically these amendments which affected the results of the vote - the pro-government factions (Unity, Fatherland-All Russia, People's Deputy, Russia's Regions and LDPR) voted against the adoption of these amendments into the Tax Code.

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