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Russia Cracks Down on Tax Evasion as Revenue Sags

October 12, 1996

MOSCOW (AP) - President Boris Yeltsin formed a high-level commission Friday to crack down on tax evaders. His action came in response to reports that earlier measures have failed to increase revenue collection.

In a national radio address Friday, Yeltsin announced the creation of a temporary emergency commission to take ``strong and decisive″ steps to end tax evasion.

Prime Minister Victor Chernomyrdin will lead the commission and will be joined by the Federal Security Service, the prosecutor-general’s office and the Foreign Intelligence Service.

The commission’s name and Russian acronym _ VCHK _ are reminiscent of the Bolshevik secret police founded by Vladimir Lenin to fight counter-revolution and root out supposed economic sabotage by the bourgeoisie.

That Emergency Commission gradually evolved into the KGB.

``We can no longer bear the situation when the poor are getting poorer and the rich are violating laws to become even richer,″ said Yeltsin’s chief of staff, Anatoly Chubais.

Top officials said Friday that tax revenues ran about 20 percent below September targets, despite Yeltsin’s widely-hailed raft of measures this summer to remedy the problem.

``The situation is bad,″ said Deputy Finance Minister Sergei Shatalov.

Shatalov said Russia’s oil, gas and manufacturing giants are among the most notorious deadbeats.

The International Monetary Fund is pressuring the government to boost its revenue collections.

Chernomyrdin said the commission will meet early next week.

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