MOSCOW, June 19 The State Duma adopted in the first reading changes to the Budget Code related to improving the tax system, as well as allowing to write off two-thirds of the regions' debts on budgetary loans.
The document was introduced by the Russian government as part of the budget package. In particular, it provides for the transfer to the federal budget of all additional revenues arising in connection with the introduction of a progressive personal income tax scale, as well as excise taxes on nicotine raw materials, on a tobacco-free nicotine-containing mixture for heating and on the pharmaceutical substance of ethyl alcohol. 
And the proceeds from excise tax on natural gas obtained for the production of ammonia are proposed to be distributed between the federal and regional budgets in the proportion of 83 to 17, respectively. The same standard for distributing income between the center and the subjects of the Russian Federation is also maintained with respect to additional income received in connection with the planned increase in the rates of mineral extraction tax on potash salts, iron ore, apatite-nepheline, apatite and phosphorite ores.
The President of the Russian Federation previously instructed the government to ensure the write-off of two-thirds of the regions' debt on loans provided from the federal budget, subject to the targeted use of the released funds for infrastructure projects and investment support. “An important decision that will create an additional incentive for the regions to develop their economies and improve the quality of life of citizens,” State Duma Chairman Vyacheslav Volodin told reporters.
In this regard, the Budget Code is supplemented with a norm that allows for the restructuring of regional public debt with a partial write-off of the principal amount if the law on the federal budget establishes the grounds, conditions and procedure for such write-off; and also subject to the targeted use of released funds to support investments and infrastructure projects. 
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Now such debt of the regions can be written off in the amount of tax revenues to the federal budget from the implementation of new investment projects. The bill proposes, in addition to taxes, to take into account insurance premiums received by the budgets of state extra-budgetary funds from new investment projects in the field of tourism. The Government of the Russian Federation will have the right to write off the region’s debt on budget loans in the amount of such contributions.
And from 2025, municipalities are given the right to direct savings from interbudgetary transfers based on the results of procurement to finance municipal programs within the framework of national projects. Changes are also being made to limit the annual amount of expenses of constituent entities of the Russian Federation and municipalities for the fulfillment of concession obligations. These restrictions will not apply to concession agreements concluded before 2024.