(Adds Econ Min comments on VAT in paragraphs 5-6)
MOSCOW, March 24 (Reuters) - Russia's Economy Ministry will submit proposals soon on corporate tax breaks, minister Elvira Nabiullina said on Tuesday -- a move that could face resistance from the fiscally prudent Finance Ministry.
The economy ministry's remit is to boost growth and analysts say the conflict between the two departments could intensify this year as Russia enters its first recession in a decade.
Tax cuts would further undermine falling budget revenues, but some companies -- including the dominant oil sector -- are lobbying for reduced levies to help them weather the global downturn.
"This year, new anti-crisis measures in tax policy are possible," Nabiullina said. "In the coming days we will come out with concrete initiatives aimed at supporting national companies and ensuring a stable revenue base for the budget."
First Deputy Prime Minister Igor Shuvalov said in January that the government will resume discussions over possible value added tax (VAT) cuts and general taxation reform this spring.
Nabiullina said now was not the time to cut VAT, which her ministry had proposed reducing last year to 12 percent from 18.
"There is no capacity in the budget to cut VAT in this way due to falling revenues," she said. She did not say what new tax initiatives the Economy Ministry was now planning to propose.
Last month Prime Minister Vladimir Putin proposed tax breaks for new oilfields, but stopped short of sweeping taxes sought by the oil lobby [ID:nLC831078].
The budget plan for this year -- approved by government last week and now awaiting discussion in parliament -- assumes a budget deficit of 8 percent of gross domestic product (GDP).
Some 300 billion roubles ($9 billion) has already been transferred out of Russia's Reserve Fund to cover the gap, a Finance Ministry official said this week. Another 300 billion roubles is expected before the end of the month, followed by a further 600 billion during April and 400 billion in May.
Finance Minister Alexei Kudrin has signalled that 8 percent is the limit for the deficit, but there is room for discussion on the top priorities within the current spending allocation.
Speaking at same event as Nabiullina, Kudrin said: "I am also for not raising taxes in the near future. Of course we should not now, during the peak of the crisis, make the work of businesses more difficult." (Reporting by Vlasta Demyanenko, writing by Toni Vorobyova; Editing by Ruth Pitchford/Patrick Graham)