Ministry of Finance (Soviet Union) - Duties and Responsibilities

Duties and Responsibilities

During the formation of the Soviet state, in the late 1910s and early 1920s, the People's Commissariat for Finance of the Russian Soviet Federative Socialist Republic (RSFSR) was created. The commissariat did not differ greatly from that of Imperial Russia's Ministry of Finance and its system. The Soviet finance ministry was a heavily centralised structure, while its predecessor was not. During its humble beginnings, the main task of the People's Commissariat of Finance were: confiscation of property, robbery and requisition; printing and creating money; and taxation.

In the immediate aftermath of the October Revolution, and during the Russian Civil War, the Soviet government forcibly confiscated property to support their government. After the inflation of the 1920s printing of money nearly ceased and confiscation of goods became harder; after years of confiscating there was simply not enough property left to fund government operations anymore. After the civil war the confiscation of property ceased and several government taxes were introduced. The ministry's tasks were summed up in the 1971 charter: "The USSR Ministry of Finance prepares the draft of the USSR State Budget and bears responsibility for the fulfilment of the USSR State Budget, both for receipts and for expenditures ". Under the rule of Mikhail Gorbachev the Ministry lost much of its power. An example being that before 1990 all foreign trade investments had to be approved by the Ministry of Finance but in 1990 the ministries of finance of the Union republics approved foreign investment. The ministry was of vital importance and in the 1971 charter the Soviet government gave the ministry broad legislative power. As nearly all organisations had some sort of financial aspects the Ministry of Finance set standards and rules for accounting and bookkeeping. It also had the power to issue regulations for the detailed application of the tax legislation. This is also a common feature in the United States Department of Treasury, although the Soviet's regulations differ in being of a highly centralised manner that the US one does not. The Ministry of Finance usually exercised its powers jointly with other government agencies. The 1971 charter states that the Ministry of Finance had the right to participate with the State Committee on Prices for price-setting in the USSR, but it also participated in the setting of salaries and the fulfillment of the five-year plans with the State Planning Committee and the State Bank of the USSR (Gosbank).

The finance ministry started the budget preparation process by preparing instructions, forms and schedules for the upcoming state budget and prepared a preliminary balance of revenues and expenditures using data estimated by the State Planning Committee (Gosplan). This preliminary budget was then sent, together with instructions, to the all-Union ministries and ministries of finance of the Union's republics. The Union branches of the Ministry of Finance then prepared a budget estimate with information received from the lower Union ministries and information given to them by the all-Union Ministry of Finance. The state budget was conceived after the Union Ministry negotiated a compromise with its republican and local branches and each Soviet republic was given its own state budget. The Economic Committees of the Supreme Soviet voted on the state budget which, if it received enough support, would become policy.