Russia’s Tax Evaders Get Warning From Yeltsin As Fiscal Crisis Grows Tax Collections At 75 Percent Of Projections

President Boris Yeltsin, whose crumbling government cannot support its army, scientists or teachers, approved creation of an emergency commission on tax collection Friday and vowed to crack down on Russia’s chronic and growing tax evasion.

Despite the urgent tone in Yeltsin’s announcement, the Russian fiscal crisis has been steadily growing worse for months and is largely of Yeltsin’s own making.

Only 75 percent of projected tax revenues have been collected this year, according to Economics Minister Yevgeny Yasin. Much of the shortfall is due to Yeltsin’s re-election campaign, during which many large companies did not pay taxes and the government did not press them, while Yeltsin also made expensive promises to the electorate, though most were later rescinded.

Now the impact is reflected in social unrest, just as it was last spring. Millions of Russians are being paid months late. Unpaid teachers are striking, the army is in disarray and wage arrears are again in the headlines. “The state system is skidding,” the Interfax news agency quoted a Russian banker as saying.

Yeltsin had promised to solve the problem of wage arrears in the spring and was helped then by an infusion of loans from the International Monetary Fund. But the backlog in wage payments remains a serious social irritant.

Yeltsin, speaking Friday in a radio address from a government resort outside Moscow where he is awaiting heart surgery, again promised to crack down on tax evaders. “There is a vicious practice of dodging taxes,” he said, laying the blame on “major commercial structures.”

“It has become a widespread practice to conceal one’s income,” he said. “Society and the state have responded to this very weakly so far.”

“I am appealing to those who do not pay taxes,” Yeltsin said. “Everybody will pay taxes - we will achieve this.”

Critics say the government has failed to go after such large firms as the natural gas monopoly Gazprom, which is 40 percent owned by the government but acts as if it were independent. Gazprom has warned government officials against trying to collect more taxes from it.

Prime Minister Viktor Chernomyrdin, a former Gazprom chief who still retains close ties to the huge company, has made no visible attempt to press Gazprom for additional revenues.