“The regime is given not to regions but to people!” — self-employed project to be expanded to 19 regions?
Russia’s State Duma deputies have voted in favour of the extension of the new tax regime in the first reading
Russia’s State Duma has recently discussed the proposal of the ministry of finance to extend the tax regime for the self-employed in 19 regions, including Perm Krai and Bashkortostan. Since the beginning of the year in four test subjects, including Tatarstan, 280,000 people who paid 1 billion rubles of taxes decided to legalise their incomes. However, not all MPs support the pilot, as there are abuses in its application. The heads of some organizations have transferred their employees to self-employment, which is contrary to the spirit of the project and the letter of the law. Nevertheless, the majority voted for the expansion of the experiment, and the draft bill passed in the first reading. However, as Realnoe Vremya found out, the residents of the new regions will have the opportunity to use the tax regime only definitely not from January 1 — the amendments will be considered in the State Duma after the New year in the second and third readings.
Will Perm Krai and Bashkortostan join?
On 21 November, Russia’s State Duma discussed the initiative, which received the approval of the government, to extend the tax regime for the self-employed in 19 regions of the country. It is proposed to include the subjects of the Russian Federation, which will not consider the tax regime on professional income as a source of additional income: self-employed citizens will have the opportunity to come out of the shadows and begin to comply with the regime in donor subjects that do not receive subsidies from the state budget, as well as in cities with millions of people. Namely in St. Petersburg, Voronezh Oblast, Volgograd Oblast, Leningrad Oblast, Nizhny Novgorod Oblast, Novosibirsk Oblast, Omsk Oblast, Rostov Oblast, Samara Oblast, Sakhalin Oblast, Sverdlovsk Oblast, Tyumen Oblast, Chelyabinsk Oblast, Krasnoyarsk Krai and Perm Krai, Nenets Okrug and Yamalo-Nenets Autonomous Okrug, Khanty-Mansi Autonomous Okrug — Yugra and Bashkortostan. According to the bill, the deduction to the budget of the self-employed is 4% of the amount of income when working with individuals and 6% — when working with legal entities.
Since 2019, in four regions — Moscow, Moscow Region, Kaluga Oblast and Tatarstan — in an experimental format, the tax regime for the self-employed — the tax on professional income (NPD) — is already in effect. The tariff includes insurance contributions to the Federal Compulsory Medical Insurance Fund (FOMS) but does not involve contributions to the Pension Fund (which, looking ahead, raised a number of questions from MPs). To participate in the experiment, it is enough to install the application My Tax on the smartphone.
Only citizens who do not have employees, who create a product or service independently without intermediaries, whose income does not exceed 2,4 million rubles a year, have the right to the NPD. By the end of October, 260,000 people had registered as self-employed, by the beginning of the meeting of the State Duma — already 284,000 (the Federal tax service monitors registration online). They declared the income of 32,6 billion rubles. The amount of tax charged on the income of the self-employed exceeded 1 billion rubles. It is curious that the Federal tax service paid attention to the assessment of the mobile application My Tax in Google Play and App Store — 4,4: “This is a very high score.”
13 companies abused the regime
A whole discussion sparked at the hearings in the State Duma around the experiment, representatives of the Communist Party and Fair Russia refused to vote for the expansion of the experiment, that nearly drove one of the authors of the bill crazy — United Russia Andrey Makarov. Offering to extend the regime to 19 new regions, the deputy said that he gave the opportunity to many to come out of the shadows, to legalise. He is sure that thanks to the guarantees provided by the law, the tax rates will not change for 10 years.
“People believed in this regime. It is clear that it takes time to sum up the results of the experiment. One and a half per cent goes to FOMS — people pay themselves, but also for regions it is important: they cease to pay in FOMS for non-working population! Yes, there are abuses. There are 13 companies that abused the regime, they transferred their employees to the self-employment regime, the Federal Tax Service knows them by name!”
At the moment, Makarov said, the law is being finalized, so that there is a tool to influence “the companies abusing the right that do not want to pay taxes at the expense of their employees”. He also explained why the experiment was extended only to donor regions and regions with million cities. The reason is that the subjects did not consider the tax regime as an additional source of income, which could make the regions subsidized, deliberately “driving people into this regime”.
“The regime is given not to regions, but to people! It is a mechanism of removal of people from a shadow: 60 per cent registered this year self-employed — those who have never paid taxes in the life,” Makarov assured.
According to him, the abusing companies were identified thanks not to tax audits but to the latest technologies of the Federal Tax Service, which allows daily monitoring of all payments of the self-employed:
“We see a person who has worked at the enterprise suddenly becomes self-employed. We understand that, on the one hand, it is necessary to pay 13 per cent of income tax and 30 per cent of insurance premiums, but according to the regime of the self-employed — only 6 per cent. You could do anything for that. This will not be tolerated!”
Will the self-employed save for retirement themselves?
The focus of the furious debate was the issue of pensions and pensioners. The representatives of all three opposition parties somehow made it clear that the self-employed mostly mean people of pre-retirement and retirement age, to whom “pocket” the hand of the tax authorities reached.
For example, Sergey Ivanov (LDPR) noted that people are concerned about what they will have a pension if they take advantage of the new regime. After all, those who did not pay taxes, and so were entitled to a minimum social pension, why all of a sudden will pay taxes to receive the same amount then?
Makarov, acknowledging this fact, considers that the regime was created for legalizing the labour market and protection from bandits of ordinary people, “who are engaged in repair of cars for money, but people come to them and force to pay money.” Now, they say, such people will be protected by the state.
As for the pension problem, for it, the FTS again has some new technology, which, it seems, in 2-3 months will be introduced: a person himself in a smartphone will have the opportunity to find out information about how much he needs to pay monthly to the Pension Fund to receive a specific pension. You can pay voluntarily to the Fund right now — by acquiring work experience and accumulating a pension.
Nevertheless, Zhirinovsky's party did not agree with United Russia. According to Deputy Yaroslav Nilov, this tax regime appeared at the wrong time — against the background of the pension reform, people, according to him, now think: “they are trying to take the last from us, but we do not work from a good life!” If part of the self-employed’s tax was already going into the Pension Fund, people would be at least motivated somehow.
Self-employed: 18,7% — taxi drivers, 10,5% — landlords
Before the vote itself, Andrey Makarov still gave additional data on the branches of the professional activity of the self-employed. It turned out that transportation (not only taxis) accounts for 18,7% of legalized (“the regime does not affect the accident rate,” he said), 10,5% — previously rented apartments illegally, consultants — 8,6%, builders — 6,7%.
“Farrakhov lived in Tatarstan for a year, discussing every problem with the local self-employed. So that as soon as any problem arose, we immediately intervened and removed the problems. The discussion like ‘have you asked people?’ has nothing to do with this law,” he concluded grimly.
As a result, albeit unconvincing but a majority — 66 per cent of the deputies — voted in favour of extending the experiment.