June 20, 1993 – Neva Bank, Alexei's Office
The tax code was seven hundred pages long.
Alexei stared at the stack of paper on his desk, bound in cheap Soviet binding, already outdated the moment it was printed. The new Russian tax system was a patchwork of Soviet-era regulations, emergency decrees, and laws that contradicted each other on adjacent pages. It was chaos. It was also opportunity.
Lebedev sat across from him, a cup of tea growing cold at his elbow. His eyes were red-rimmed from three days of studying the document, his usually neat appearance slightly disheveled. But his expression was triumphant.
"It's beautiful," Lebedev said. "Absolutely beautiful."
"The tax code is beautiful?"
"The loopholes are beautiful. Look at this." He pulled out a marked section, stabbing his finger at a paragraph. "Article 47, subsection 3: Interest payments on commercial loans are fully deductible as business expenses. No cap, no limit, no restrictions. You borrow money, you pay interest, you deduct the interest from your taxable income. Simple."
Alexei read the section. It was indeed simple. Dangerously simple.
"So if Neva Transport borrows from Neva Bank at twelve percent—"
"The interest payments reduce Neva Transport's taxable income. The interest income increases Neva Bank's taxable income. But—" Lebedev pulled out another marked section. "Article 52, subsection 7: Banks are taxed at a reduced rate on interest income from commercial loans. Fifteen percent instead of the standard thirty-five."
Alexei did the math quickly. Neva Transport paid twelve percent interest. That interest was deductible, saving them roughly four percent in taxes at their effective rate. Neva Bank received that interest and paid fifteen percent tax on it. Net effect:
Neva Transport saves: 4% of interest paid
Neva Bank pays: 15% of interest received
Combined: The group loses 11% of the interest to taxes
But that was just the surface. Lebedev had more.
"Now look at this." He pulled out another section. "Article 89: Losses can be carried forward indefinitely. If Neva Transport shows a loss—say, by accelerating depreciation on new trucks—they pay no tax. The interest deduction becomes even more valuable."
"And if Neva Bank has profits from other sources—"
"They offset against the losses. Consolidated filing, Article 94. The group pays tax only on net profits, after all deductions, including interest paid between entities."
Alexei leaned back, the implications cascading through his mind. They weren't just moving money between pockets. They were using the tax system to subsidize their growth. Every ruble of interest they paid themselves reduced their tax burden. The government was effectively paying them to borrow from themselves.
"How much can we save?"
Lebedev pulled out a spreadsheet—his own creation, not government-issued. Numbers filled the columns, projections based on their current operations.
"Assuming we lend two hundred thousand internally this year, at twelve percent, the interest is twenty-four thousand. That reduces our taxable income by twenty-four thousand. At our effective rate of thirty percent, that's a tax saving of about seven thousand dollars."
"Seven thousand?"
"Seven thousand. And that's just the beginning. As we grow, as we lend more, the savings grow. By next year, we could be saving twenty thousand. By the year after, fifty."
Alexei stared at the numbers. Seven thousand dollars was real money—enough to buy another truck, pay a dozen workers for a month, fund another operation. And it was money they kept because the government's own rules allowed it.
"The government is subsidizing our growth," he said quietly.
"Exactly. Every dollar we lend to ourselves, the government gives us back a piece. It's insane. It's also completely legal."
"For now."
"For now. The laws could change. The loopholes could close. But right now, today, this is the system. And we'd be fools not to use it."
Alexei thought of his grandfather's lessons. A commander uses every advantage. Terrain, weather, morale, intelligence. The enemy's rules are just another kind of terrain.
The tax code was terrain. And they were learning to navigate it.
June 25, 1993 – Neva Transport, Kolya's Workshop
The new trucks were arriving in batches.
Kolya had organized the maintenance schedule, the driver training, the integration into their existing fleet. Ten new vehicles, Finnish-made, reliable, efficient. They would transform their capacity.
Alexei found him beneath one of the trucks, his boots visible, his voice issuing commands to an apprentice. When he emerged, his face was streaked with grease, but his expression was satisfied.
"These are beautiful. German engineering, Finnish assembly, built for our roads. They'll run for years."
"The accounting department has been asking about depreciation schedules."
Kolya blinked. "Depreciation?"
"How we write off the cost of the trucks over time. For tax purposes. We can accelerate the depreciation—take a larger deduction now, smaller later. Saves money on taxes."
Kolya's expression was confused. "But the trucks are assets. They have value. Writing them off—"
"Is a paper exercise. The trucks still run. The value is still there. But on paper, we show a loss, which reduces our tax bill." Alexei smiled. "It's legal. It's smart. And it gives us more cash to buy more trucks."
Kolya shook his head slowly. "I don't understand money. I understand engines. Engines are honest."
"Engines are honest because they have to be. Money is whatever we make it."
He left Kolya to his work, walking through the repair bay, past the mechanics and the trucks and the organized chaos of a growing business. Every truck, every mechanic, every driver was part of the machine. And the machine was learning to optimize not just routes and loads, but money itself.
June 28, 1993 – Neva Bank, Conference Room
The meeting included everyone who mattered.
Alexei at the head of the table. Lebedev with his spreadsheets. Kolya representing transport. Ivan for security. Even Volodin, the front man, looking uncomfortable in a suit that was still too new.
Lebedev ran through the numbers. Internal loans: two hundred thousand to Neva Transport, fifty thousand to Neva Security for new equipment, another fifty thousand to Volodin's company for "expansion." Total interest payments: approximately thirty-six thousand annually. Tax savings: roughly eleven thousand dollars, assuming current rates held.
"That's money we keep," Lebedev concluded. "Money that would otherwise go to the government. Money we can reinvest."
Volodin spoke hesitantly. "And my role in all this?"
"You're the visible borrower. When the tax authorities look, they see Volodin Import-Export, a legitimate trading company, borrowing from Neva Bank at market rates. They don't see that the money flows through you to Neva Transport."
"And if they ask where the money goes?"
"Then you show them invoices. Real invoices, for real goods. The trucks from Finland, the electronics you import, the timber you export. All real transactions, all documented. The fact that we own both ends of the chain is irrelevant."
Volodin nodded slowly. "And my cut?"
"Five percent of the tax savings. Plus your regular loan at favorable rates. Plus the knowledge that you're building something bigger than yourself."
Five percent of eleven thousand was five hundred fifty dollars. Not a fortune, but real money. Enough to keep Volodin loyal.
Ivan spoke up. "Tarasov's people are still watching. If they learn about this structure—"
"They won't. Volodin is clean. His company is clean. The loans are documented. Everything looks normal."
"For now."
"For now. We'll deal with Tarasov when we have to."
The meeting continued, discussing depreciation schedules, loan documentation, the fine points of tax law that would save them thousands over the coming years.
When it ended, Alexei sat alone in the conference room, staring at the numbers Lebedev had left behind. Eleven thousand dollars in tax savings. From money they had created by lending to themselves. From a government that didn't know it was subsidizing its own enemies.
He thought of his mother's hospital bills. Forty thousand dollars would have saved her. Forty thousand dollars that the Soviet healthcare system couldn't provide. Forty thousand dollars that he now had, many times over, because he had learned to work the system instead of trusting it.
Be better than this world.
He didn't know if manipulating tax laws made him better. But it made him smarter. And in the world that was coming, smart might be the only thing that mattered.
June 30, 1993 – Neva Bank, Alexei's Office
The month ended with solid numbers.
Deposits: one point eight million dollars. Loans outstanding: four hundred fifty thousand. Internal loans: three hundred thousand. Estimated tax savings for the year: fifteen to twenty thousand dollars.
Alexei reviewed the figures one last time. The bank was working exactly as intended. Not just as a safe home for their money, but as a tool for growth, a machine for optimizing their finances.
He pulled out his mother's photograph, worn from years of carrying. Her face smiled at him from another world.
Be better than this world.
He was trying. One loan, one deduction, one tax saving at a time.