Russia cannot afford to raise taxes for two to three years or it will face slower economic growth and a low level of modernization, Finance Minister Alexei Kudrin said on Monday.

"If we choose the wrong way now, we will understand in two to three years that we should either drop (modernization) plans or raise taxes. But I do not believe that there is a possibility of raising taxes. It would be an additional burden on business which woud slow economic growth and modernization down," Kudrin told a Tax Service meeting.

He said that one of Russia`s key problems was that the government had failed to clearly formulate its goals and objectives.

"The state changes the rules frequently, sometimes rules are set, but not followed," Kudrin said.

This year the government has increased companies` tax burden by 2% of gross domestic product.

Kudrin, a staunch opponent of higher taxes, has said that if the government is weak and afraid to implement structural reforms, it would have to raise taxes.

Economic Development Minister Elvira Nabiullina has also said that increasing taxes to plug the budget deficit is a dead-end.
sections: Society, Economics