Rustam Minnikhanov: “There are no miracles. We don’t go into debt here”

How the Tatarstan president taught the Ministry of Finance how to work, gave instructions to tax workers, bailiffs and districts’ leaders

Reduction in debts is one of the priority tasks of Tatarstan. President of the republic Rustam Minnikhanov said about it on 17 July giving a speech at a meeting of financial, treasury and tax agencies about Tatarstan's consolidated budget execution. The head of the republic gave instructions on how to implement national projects, improve governors’ KPI and perform other tasks. Realnoe Vremya’s correspondent observed the process.

74% of incomes to Moscow

There was some growth of gross regional product (GRP) in Tatarstan from January to May 2019 — 100,7% against last year’s analogous period. The industrial production index totalled 101,3% for six months, the volume of construction works was 90,5%, retail trade turnover — 101,9%. The president of Tatarstan read out the numbers on 17 July at the republic meeting of financial, treasury and tax agencies about the consolidated budget execution of the Republic of Tatarstan for the first half of 2019 and tasks for 2019. The meeting took place in the Tatarstan Government House. Administrations from districts and cities of Tatarstan watched the process via teleconference.

The republic collected over 536 billion rubles of income for six months — taxes, non-tax receipts, customs duties, payments to extra-budgetary funds. 74% of them went to the federal budget. According to the president, the volume of incomes of the consolidated budget paid in taxes and non-taxes exceeded 137 billion rubles and has positive dynamics — almost 7% growth against the first six months of 2018.

“Our budget has a considerably planned deficit we cover with the money that left during the previous years,” Minnikhanov stressed.

National projects and governors’ KPI

The head of the republic also talked about national projects. This year, 23,7 billion rubles will be allocated for them. Moreover, almost a third of this money (7bn rubles) will come from the republic’s budget. Rustam Minnikhanov charged the government with constantly monitoring how indicators and results of regional components of national projects were reached. This is necessary to perform the tasks that were planned in agreements with the federal centre.

Only 3% of the planned money for 2019 was spent on national projects in Tatarstan. The Ministry of Agriculture spent 4,2% at the moment, the Ministry of Construction did 5,3%, the Ministry of Health — 15,2%, the Ministry of Transport — 25%. 8,4bn rubles were sent to national projects, 7,5bn rubles were used.

In addition, Minnikhanov raised the topic of new KPIs for governors. It should be reminded that in late April President of Russia Vladimir Putin signed a decree according to which indicators for measuring the performance of regional leaders are introduced in the country.

As Realnoe Vremya wrote, Russian Minister of Finance Anton Siluanov headed a working group that would define indicators for measuring governors’ performance and correct them. Vice Premier Vitaly Mutko, Minister of Economic Development Maksim Oreshkin, Moscow Mayor Sergey Sobyanin kept him company. Due to this, the president of Tatarstan instructed the Tatarstan Ministry of Economy to “continue the work with federal authorities to improve and clarify the methods of calculation and target numbers of these indicators”.

“Changes to budget legislation regarding tax costs require attention,” he went on. “This year we have to adopt corresponding regulations and evaluate the effectiveness of tax benefits for the budget.”

Salaries grow, taxes are paid

Head of the Tatarstan administration of the Federal Tax Service Marat Safiullin said that there was growth in key taxes for six months. Mineral extraction tax was 190,1bn rubles (plus 20,4%), profit tax totalled 62,5bn rubles (5%), VAT — 64,5bn (46,1%), income tax — 37,2bn (7%), excises — 13,7bn (25,7%).

“While salaries in the republic grew just by 5,2% in January-May,” the major tax worker of the republic added.

However, land tax paid to local budgets reduced in the first half of the year. A year ago, the tax service collected 3,79bn rubles, 3,73bn rubles (96,7%) in 2019. In Safiullin’s opinion, the main reason rests on a lowered taxation rate, which came into force this year. He also named early tax payment in 2018 and the transition of land parcels from one category to another.

Tatarstan received 408,3bn rubles of incomes managed by tax agencies during the first half (growth is 17,3%). 279,3bn rubles went to the federal budget (growth is 19,5%). And the region’s consolidated budget received 129bn rubles (growth is 12,7%).

“Cooperating with law enforcement agencies and the Federal Financial Monitoring Service of the Russian Federation, we continue the elimination of fly-by-nights from the tax environment. Today the number of such companies is 2,3% of the total number of companies registered in the republic,” Safiullin noted.

The amount of complaints about taxes and duties reduced by 14,5%. The number of tax agencies’ actions they won was 71%, and this indicator was 52% in the first half of 2018.

“There are no miracles”

Minister of Finance of Tatarstan Radik Gayzatullin, who switched to Tatar from time to time, said that income tax was 49,9bn rubles for six months. 12,9bn rubles came from the federal budget (39% of the yearly plan). Costs of the republic’s consolidated budget amounted to 137,5bn rubles. Costs of the republican budget were 116,2bn rubles.

The republican budget allocated 22,2bn rubles of interbudgetary transfers to the local budget. Costs of municipalities were 43,5bn rubles.

Having heard the reports out, Rustam Minnikhanov claimed that 27% of companies “had a loss in income tax” for the first four months in 2019. He required tax workers, bailiffs, the Ministry of Internal Affairs, the prosecutor’s offices and regional leaders to reduce the debts as much as possible. Related ministries should join this work.

“You should look at loans very carefully. Ministry of Finance, don't take any liberty! You have a budget, you can work within it. But some opaque scheme must be stopped. There are no miracles. There is a certain amount of money you can count on. We don’t go into debt here,” Rustam Minnikhanov claimed.

As for income tax, the president gave a task to activate the work of commissions that legalise illegal salaries. He also asked to control the implementation of the social mortgage programme and the construction sphere: “There must be no abandoned construction”.

In the end, he wished the functionaries did their best so that businesses would develop and the quality of life in the republic would improve.

By Timur Rakhmatullin. Photo: