Ministry of Finance initiative may force small enterprises into dark

28 october 2014 | IA REGNUM

Regions may get an opportunity to limit revenue, staff number, capital costs of companies, which can depend on benefits for small enterprises, since 2015. The Ministry of Finance of the Russian Federation suggested corresponding draft law.

Sergey Aristov
Sergey Aristov
Department for Regional Policy and Far East Development

The act consideration will be fast, and there is a high probability that it will be declined, reports RBC with reference to sources in the Cabinet. Regions need this opportunity with sales tax to increase payments into the budget and solve the problem with splitting of large entities into small enterprises.

“Russian regions are different. In Moscow an enterprise is considered small, in other regions this very enterprise is considered large and in some regional centers, in province this is the only one business”, said the Head of Directorate for Regional Policies Sergey Aristov giving comments on the draft law to IA REGNUM reporter. It is a good idea to give a scope for regional differentiation; however, it is inconsistent with small business support system, it will hardly bring funds in regional and municipal budgets.

“Recent years’ experience demonstrates, that these decisions will only speed up this leave, while revenue declines”, explained the expert.

Suggested draft law will let the authorities of regions decline beneficiaries “attribution criterion” 10 times: from 100 employees to 10, from 60 million rubles to 6 million, according to the Minister of Finance Anton Siluanov. “Russian Armor”, all-Russian non-governmental organization, calculated that negative effects of tax burden increase will affect 45% of legal bodies and 19% of individual entrepreneurs. Withdrawal from beneficiaries means that entrepreneurs will have to pay corporate tax (20%) or TIPI,  property tax (2%), land-value tax (0.3-1.5%), full insurance fees (30%).