Court hits PEN with hefty tax bill, freezes its bank account
February 10, 2006 12:00 PM ET
New York, February 10, 2006—The Committee to Protect Journalists is alarmed by a Moscow court's decision to impose hefty property taxes on the Russian branch of International PEN, an association of writers that promotes artistic exchange and defends free expression. The ruling against PEN comes against the backdrop of a government crackdown on nongovernmental organizations or NGOs.
The Moscow Court of Arbitration ruled on January 27 that the Russian PEN Center, which has operated for 15 years, must pay the federal tax agency 2 million rubles (US$70,802) in property taxes. The court also froze the center's bank account, Aleksandr Tkachenko, vice president of the Russian PEN Center, told CPJ in a telephone interview today.
Tkachenko said tax authorities have no right to demand land taxes from PEN because the center merely rents its property from the Moscow city government. "How can we owe land taxes for property we do not own?" Tkachenko asked. "This is yet another political move on behalf of the government to crack down on the civic sector in Russia." PEN plans to appeal the ruling, Tkachenko said.
"We call on the courts to overturn this troubling decision against Russian PEN Center and lift the onerous restriction on its bank account," CPJ Executive Director Ann Cooper said.
Tkachenko said he is afraid that hefty land taxes could bankrupt the organization. "If we lose the appeal, we will have to close down," he said. The ruling comes a month after President Vladimir Putin signed into law a restrictive bill regulating the work of NGOs, including those dedicated to promoting press freedom and supporting independent media.
The measure gives the Justice Ministry's Federal Registration Service broad authority to close NGOs for engaging in activities that are counter to the "political independence of the Russian Federation" or that violate the constitution. The measure also empowers the service to close NGOs that engage in prohibited—but unspecified—activities. In November, Russian PEN Center sharply criticized the proposed legislation.
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