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10 Apr, 2009 11:43

Beslan victims scandal highlights tax law quirks

Beslan victims scandal highlights tax law quirks

The Russian tax service came under fire from human rights activists after requesting families who suffered from the Beslan school hostage crisis to pay taxes for aid they received.

All families in question had their children educated in a private school near Moscow. Podmoskovny school takes no fees from the parents in a charitable move.

According to Russian law, recipients of aid are taxed as if it was a profit made through entrepreneurship or received as a salary. This is to prevent tax evasion by corporations, who use charitable organisations to reduce their taxation base.

But for Beslan victims, the law turned sour when tax authorities decided they received profit by receiving free education at a private school.

Parents are demanded to pay up to 2 thousand dollars in taxes and late payment fines for several years of education, which is a big sum for many of them, reports Kommersant newspaper. About 30 families received demands to cover tax debt.

The families were quick to protest.

Beslan tragedy

The Beslan hostage crisis took place in the North-Ossetian town of Beslan in September 2004, after a group of terrorists took 1128 people hostage in a local school. Most of them were children. During a chaotic siege of the school 318 hostages died along with two police officers and 10 commando operatives. Almost eight hundred people were wounded.

“The parents refuse to pay, but they won’t take the kids from the school, either, because they see how good it is for them. The victims believe the state, which failed to keep their children safe, has no moral right to cash in on those who miraculously survived,” said Ella Kesaeva, co-chairman of the Beslan Mothers human rights group, in a statement published on the organisation’s website.

The tax service is acting in accordance with the law, pointed out Irina Yasina, member of the Presidential council for civil society, in an interview to Ekho Moskvi radio station. She added that in most countries in the world, charity is tax-free.

Human rights activists were infuriated with the news.

“It’s like giving money to a beggar in the street and then demand that she pay taxes from it. It’s horrible that it’s happening to Beslan victims,” director of a non-governmental group defending children rights, Boris Altshuler, told Novie Izvestia newspaper.

Tax authorities may have trouble collecting the debt because parents can not be held liable for it, lawyer Sergey Shapovalov, a partner at ‘Tax help’ law firm, told Kommersant Daily.

“The tax can be attributed only to children directly, because parents in this situation are merely their legal agents. And children have neither salary not scholarship. Theoretically, their property could be arrested by a court, but they must first own something.”

The Podmoskovny boarding school was founded in 2004 by the former head of the oil company Yukos, Mikhail Khodorkovsky. It is now supervised by his father Boris.