Soviet Economy Booms

Press, Volume CVI, Issue 31142, 19 August 1966, Page 11

Soviet Economy Booms

fy Z Press Assn — Copyright) MOSCOW, August 17. The Soviet economy Is making bigger profits than ever before, it was announced today. This was credited to cur-| rent economic reforms, which make profits the key yardstick for industry, and to the “growing efficiency” of the Soviet system. A government statement showed that, in the first six months of this year, Russia's State-owned economy returned a profit of 20.157 million dollars. The figure did not include State and collec tive farms This profit figure is up 8 per cent from the first six! months of 1985. Tass. the Soviet news agency, said in releasing the figures. . The percentage increase in

profits was down from the 11 per cent first-half increase recorded between 1964 and 1965. But Western economic experts in Moscow said the Kremlin's current economic reform campaign—which is aimed directly at raising profits —probably cut into profits instead in recent months They explained that the reforms, which involve a shift in responsibility from central planners to local managers, entailed an inevitable amount of initial confusion and expense. The experts predicted that the reforms, once they were fairly well established, should enable the profit margin to grow even faster. The total profits for the first six months of this year amounted to 222 million dollars more than expected by .the nation’s economic plan. Without giving exact fig ,ures, Tass said industrial en- ■ terprises accounted for

“almost two-thirds” of the profit. Transport facilities accounted for 16 per cent of the profit, it said.

But Tass also said half the national revenue still continued to come from taxes, including hidden sales taxes, much of them on consumer goods. Soviet citizens pay low income taxes—the minimum tax rate is about 13 per cent. But almost all consumer goods, including food, carry a sales tax. Four items—liquor, tobacco, textiles and sugar—account for 60 per cent of all sales taxes. Price tags never mention this tax, and many consumers are unaware there is one. Tass predicted that industrial orofits. which were only two-thirds as big as total taxes in 1958, would equal taxation this year, “which is a reflection of the growing efficiency of social production.”