Kremlin gets involved in Vimpelcom tax wrangle

The Kremlin is engaging in a damage limitation exercise to try and assuage Vimpelcom investors’ fears in the wake of recent events which saw the Russian mobile operator hit with a USD158 million tax bill. In light of the near-bankruptcy of oil major Yukos, many shareholders have been panicked into selling stocks following the publication of Vimpelcom’s preliminary tax assessment for the year 2001. The bill, which could be an error on the part of an unnamed tax official, raises Vimpelcom’s effective tax rate for 2001 from around 30% to 70%. The Kremlin has apparently not yet decided on its course of action, but Russian analysts say it is likely that the official concerned will be sacked and the tax bill significantly reduced.