Tax experts estimate that only about half the country's personal earnings yield

Tax experts estimate that only about half the country's personal earnings yield income tax, adding to a revenue collection crisis that has reduced budget forecasts to gibberish. The rest of the cash swirls around illegally in the large black economy.This year, the government has gone to unprecedented lengths, bombarding the 148 million population with intimidating television advertisements. One shows a man caught in the cross-hairs of a telescopic sight. "The choice is yours," growls the announcer.Alarming footage has been screened showing the tax police's 500-strong Swat team in action. Their equipment includes grenades, tear gas, AK47 assault rifles; mountaineers and snipers are among their ranks. True, they are normally used to pursue mafia-run businesses and other non-paying companies, rather than individuals But that is beside the point. The cash-starved authorities are quite happy to scare the public into coming clean.Tax gathering in Russia is no easy task.

Last year - when Russia managed to raise only about two-thirds of taxes - 26 tax officials were killed and 74 wounded in the line of duty. Several dozen have had their homes burned down, and at least one was kidnapped.The violence is a result of a running war between the tax authorities and non-paying corporations. (These owe billions: half of all Russia's overdue tax is owed by only 73 enterprises.) But it deepens the rift in a country where the federal authorities are seen as inept and corrupt.Distrust of officialdom is a central part of the problem. In a recent survey by the Russian Marketing Research Company, 61 per cent agreed that tax evasion is not a crime. "One of the greatest sources of this in was the amount of money that the government spent on the military in Chechnya," said Peter Reinhardt, personal tax manager with Ernst & Young in Moscow.Broadly, the top rate of income tax is 35 per cent, which kicks in for those earning above $8,500 (pounds 5,312) a year. Average wages are closer to $1,800, which is taxed at 12 per cent. VAT is at 20 per cent.Those who lie on their tax returns, or fail to submit them, face penalties ranging from a fine which equals their tax debt, plus interest, or - for repeat offenders - a jail sentence of up to three years.The Swat teams do not help.

"They tend to come through the front door and put a revolver up the receptionist's left nostril, no matter what kind of business they are dealing with," said one Western analyst "It's not very nice.". The monument to the shipyard workers of Gdansk bears three anchors, to symbolise hope. But hope is in short supply as the shipyard, birthplace of Solidarity, is finally being closed after 17 years of financial problems and attempted restructuring. The Polish government is mumbling about a deal to save the yard involving a joint programme with the profitable Szczecin shipyards, but the future looks bleak. After being threatened with closure in 1980, then again in 1988, the Gdansk yards were reprieved, to limp along during the early Nineties while their champion, Lech Walesa, was President of the Republic.Mr Walesa returned to work in the shipyard briefly when he lost the presidential elections n 1995, but his time there was short-lived. He went back to work, he said, because without a presidential pension, he had no money to support his family of eight children. After this stunt, the government passed a new law allowing for ex-presidents to receive a pension.

Now he spends his time between the Lech Walesa Institute, where he gives interviews, lecture tours abroad, and the new house he is building in Warsaw's exclusion Oliwa district.An air of resignation hangs over the town as the remaining 3,800 men are given their cards and prepare to search for jobs But resignation is the preserve of the townsfolk. The workers are angry, as evidenced by the daily protests in the past weeks, not only in this port but throughout Poland.At the Lenin yard, Wojciech Kowalczyk is clocking in for his final shift, as he waits to be laid off the following day. "They said they would reconstruct Gdansk for the city's millennium this year," he says, "but this is what they meant This is their gift to us. The yard could stay open if only we had support."Mr Kowalczyk has been a locksmith at the yard since he left school, and earns 700 zloty a month (pounds 140) for a 55-hour week He will receive no redundancy pay. The local job agency says there are nearly 1,500 jobs vacant in the region - a figure disputed by Solidarity - but none of them is related to the shipping industry "I don't know what I will do now," Mr Kowalczyk, says. "There is no work, and I am angry."The announcement of the shipyard's closure was extremely bad timing; simultaneously, the "Order of the White Eagles" - a medal of honour - was being awarded by President Aleksander Kwasniewski to Mieczyslaw Rakowski, the former prime minister who tried in vain to close the Lenin yard in 1988.