Yeltsin Fires Tax Man, Issues Threat

President Boris N. Yeltsin fired Russia’s top tax official Friday for failing to collect billions owed by some of the country’s wealthiest companies, and he put the debtors on notice that they face property confiscation or closure unless they settle their arrears.

Though his actions amounted more to a gesture of irritation than to serious intervention in Russia’s financial crisis, the moves impressed Western lenders and investors. Pressure eased on the beleaguered Russian currency, the ruble, while the International Monetary Fund gave preliminary approval to the release of a suspended $670-million loan.

IMF officials have been holding up the funds for months because of the Russian government’s poor performance on tax collection and its propensity for overspending.

“I think the government’s statement and measures will stabilize markets,” John Odling-Smee, the IMF’s senior European official, told reporters in announcing the funding approval.

Odling-Smee also voiced support for the Russian Central Bank’s promise to avoid devaluing the ruble, saying that such a move would be neither necessary nor advisable under current conditions.

A ruble devaluation would force up prices for Russians already struggling to make ends meet in this country’s painfully protracted transition to a market economy, and a stable ruble is one of the government’s few successes despite more than seven years of reforms.

After Yeltsin met with key finance officials early in the day, he dismissed Alexander Pochinok as director of the State Tax Service and replaced him with former Finance Minister Boris G. Fedorov. A 40-year-old economist, Fedorov immediately vowed to crack down on the notorious tax cheats, warning that major offenders could face imprisonment if they do not pay their debts.

Huge state-owned energy companies such as the natural gas monopoly Gazprom, the federal Railroad Ministry and the electricity empire United Energy Systems owe the government billions of dollars in unpaid taxes, claiming cash-flow problems caused by the failure of other state agencies to pay them.

Fedorov said he planned to consolidate the collection of state revenue into a single ministry or agency, doing away with the current chaos of dozens of government offices having the power to assess and collect the revenue designated for their upkeep.

Also after Friday’s meeting, Prime Minister Sergei V. Kiriyenko announced a sheaf of revenue-generating moves approved by Yeltsin, including larger share offerings in attractive Russian companies still owned by the state, that he said should earn government coffers at least $2 billion over the next few months. The state will also make access to its oil pipelines contingent on oil companies being free of tax debts--a condition likely to spur some of the worst laggards into bringing their accounts up to date.

On Tuesday, Yeltsin announced a package of spending cuts aimed at trimming $7 billion in outlays from the budget this year. But vows to slim down the bloated government bureaucracy and cease unjustified tax breaks to friends of Kremlin insiders have been made and broken repeatedly throughout Yeltsin’s financially troubled second presidential term.