First deputy head of the presidential administration Vladislav Surkov is in charge of a working party that has prepared amendments to the relevant legislation.

According to ‘Vedomosti’ (a newspaper) legislative reform is to proceed in three stages. President Dmitry Medvedev introduced the first package of proposals produced by the working party into the Duma (Parliament) at the beginning of the summer. Basically he was looking for simplification of the bureaucratic procedures connected with the registration of NGOs. By this autumn a set of amendments designed to stimulate charitable activity and improve the position of NGOs as regards taxation should be ready. In 2010 it is proposed to tidy up the legal paperwork relating to NGOs and to put a special tax regime in place for them.

ASI has been told that four packages of amendments have been prepared. The first two relate to changes to the law on charity regarding earmarked capital and, connected with these, to the Taxation Code. These amendments have been publicised on the website of the ministry for economic development. The fiscal stimuli are to concern individuals; for instance, outlay on journeys and accommodation by volunteers will not be deemed to be income received (for tax purposes). Nor will medical treatment provided by charitable organisations for orphaned children or money donated by them for such children be deemed to be income. Furthermore, resources donated by private individuals to charities and NGOs working in socially significant priority areas (science, culture, education, health, and social and legal assistance for the public) will not be taxable. Profits tax will not be levied on services provided by NGOs gratis or subsidies paid out of the state budget. Corporations that donate towards earmarked capital will be able to calculate deductions from their taxable base. Such capital may not be touched (only the interest may be expended on activities that conform with the charter) which means that it is not open to misuse.

The third package of amendments allows government agencies to support NGOs just like small businesses, for instance, by giving them the right to extend lease agreements on premises occupied by them.

The fourth package corrects the law on advertising. Constraints affecting advertising in general will not apply to social advertising. If government departments can achieve speedy consensus, the amendments could be introduced into the Duma this autumn.