Siluanov in Kazan: “Quickly inject budget money into the economy”
The Russian finance minister asked Tatarstan to address national goals and not to tighten the tax burden for those who is shifting from the UTII to patent
Assessing the impact of the pandemic on the economy of one the country's major donor regions, Russian Finance Minister Anton Siluanov urged regional authorities to quickly engage in achieving the country's national goals until 2030. “We annually allocate 1 trillion rubles to the regions. Each subject must involve all the tools — this is the most important task," he urged. The important political topic did not prevent him from meticulously asking about the real issue — how painless the transition from the unified tax on imputed income (UTII) , which is cancelled from 1 January 2021, is going. It turned out that the patent system in Tatarstan will be approved at the end of December, but almost 43% of entrepreneurs agreed to switch to simplified taxation system. Anton Siluanov personally asked the tax authorities to be more loyal to small businesses.
The minister of finance of Russia comes only on New Year's eve
Minister of Finance of Russia Anton Siluanov visited Kazan on 18 December. In the last three years, he made it a rule to come to the capital of the republic to hear the final report on the implementation of the consolidated budget of Tatarstan, and he clearly could not miss this event in the “coronavirus” year. He not only measured “the pulse” of the donor region but also announced new federal guidelines for the regions. On this occasion, a hundred Tatarstan officials gathered in the Government House that day, who took part in the final joint board meeting of the republican ministry of finance, the tax service, and the department of the republican treasury of the Republic of Tatarstan.
In his opening speech, President of Tatarstan Rustam Minnikhanov once again outlined the impact of the pandemic on the regional economy, which was repeatedly voiced last week.
“The execution of the republican budget took place in difficult economic conditions. The volatility of oil prices and the dollar exchange rate, the decline in production and consumption had a strong impact," the president reminded.
According to him, the GRP of the republic is going to amount to about 2,4 trillion rubles, the industrial production index — 2,6 trillion rubles (it will decrease to 98% by the level of 2019), but the output in agriculture will grow to 103,1% — 268 billion rubles.
Speaking about the financial consequences, the president did not use figures. He noted that the volume of tax and non-tax revenues of the consolidated budget has significantly decreased, but thanks to federal support, the revenue part, taking into account gratuitous receipts, has remained almost at the level of last year. The head of the republic called the reduction of tax debt, which is 8 billion rubles, the source of income in the next difficult year. However, even without special knowledge, it was clear that the signal was made for debtors and evaders who are not in a hurry to pay taxes.
Donor flows have shrunk by 125 billion rubles
Marat Safiullin, the head of the federal tax service of the Republic of Tatarstan, presented a complete and up-to-date picture of the state of tax collections in the year of the pandemic. “This year has been one of the most difficult. Entire sectors of the economy were hit by the pandemic, but support measures helped to avoid cataclysms and social consequences," he said.
According to Safiullin, tax collections to all levels of budgets collapsed by 166 billion rubles. According to him, this year the republic is going to collect 672 billion rubles instead of 838 billion in 2019, or by 20% less. Most of all, 125 billion rubles of losses, is projected for revenues to the federal budget. This year, Tatarstan will transfer 424 billion rubles instead of 550 billion rubles last year. The consolidated budget of Tatarstan will suffer significantly less — here losses are estimated at 40,3 billion rubles. Tax collections will amount to 248 billion rubles instead of 288 billion rubles in 2019.
Marat Safiullin: “This year has been one of the most difficult. Entire sectors of the economy were hit by the pandemic, but support measures helped to avoid cataclysms and social consequences”
The largest losses are associated with federal revenue sources. The largest failure related to the UTII — minus 146,8 billion rubles, or by 39%. The second most important loss is income tax. It fell by 61,3 billion rubles, or by 43%. The least affected by coronavirus are local taxes — on property, land tax, which are collected with a small plus.
Coming out of the shadows, or Who paid 1,2 billion in personal income tax at once
In these circumstances, the main task of the tax authorities is to fight the shadow economy. However, we are not talking about increasing administrative pressure on businesses, Marat Safiullin warned. But the barriers to unscrupulous taxpayers will remain in place. According to Safiullin, special supervision will be introduced to control VAT collections. Due to the tightening of control, the tax authorities expect to increase revenues by almost 10 billion rubles this year — up to 89 billion rubles.
At the same time, taxpayers sometimes agree to voluntarily pay extra. Thus, the treasury was paid 1,2 billion rubles. Strict control has been introduced over the administration of income tax. It was collected in the amount of 48 billion rubles.
Twice as large fees gave been by provided personal income tax — 81,7 billion, which is at the level of 2019. Here Marat Safiullin reported sensational news that last year one individual was paid a tax of 1,2 billion rubles. According to rumours, we can talk about the head of the Kazan Production and Construction Association, Ravil Ziganshin, who for a long time was listed as one of the major debtors of the Federal Tax Service. However, it was impossible to get prompt confirmation.
Marat Safiullin: “Those who do not pay taxes — we initiate bankruptcy. Thus, the treasury was paid 1,2 billion rubles”
Special control over salaries
For total control over personal income tax collections, the tax authorities have created a special unit since October 1, which will identify gray schemes in the payment of wages. According to Safiullin, the plan for collections is synchronised with the growth of wages in Tatarstan.
The tax authorities are determined to apply punitive measures in relation to malicious defaulters. “Those who do not pay taxes — we initiate bankruptcy. Thus, the treasury was paid 1,2 billion rubles," he reported. In general, when collecting debts, priority is given to soft measures. “Six settlement agreements for 200 million rubles were signed. Eleven taxpayers received a delay of 1,1 billion rubles. Another 4 are under consideration," he said.
To replace the UTII: what the patent will be
At the end of the speech, Anton Siluanov asked how the preparation for the transition of small businesses from the single tax on imputed income to other tax schemes is going: “How is the transformation going? What modes are selected? What comfort modes have been created? It is a week before the New Year," the minister asked.
It seems that Marat Safiullin did not wait for this question and slowed down a little, not knowing how to give a specific answer. “For sole proprietors, there are three types — simplified, patent or, if they fall under the action, the regime for the self-employed. Information campaign is going," he replied cautiously.
According to Safiullin, out of 30,000 entrepreneurs who worked under the UTII, 43% chose the new simplified system. “The rest are being determined," he said. And he added that for the transition to a patent, prices are still being determined. “They will not be greatly increased, so as not to create pressure on businesses," he promised.
“Anton Yuryevich, we asked not to change the scheme for at least three years," Tatarstan President Rustam Minnikhanov said. “I addressed to the prime minister. But our appeal was not supported. Nevertheless, the decision has been made and we will implement it.”
Midkhat Shagiakhmetov: “We have 50,000 legal entities worked under the UTII and 3,000 sole proprietors. For each type of activity, the potential income was calculated so that the transition was soft”
The final clarity was made by Minister of Economy of Tatarstan Midkhat Shagiakhmetov. According to him, the conditions for the transition to the patent will be approved at the next session of the State Council of the Republic of Tatarstan. “We have 50,000 legal entities worked under the UTII and 3,000 sole proprietors. For each type of activity, the potential income was calculated so that the transition was soft," Shagiakhmetov said. Later, he explained to journalists that patents are being developed for 80 types of business activities, and the rates will depend on the area of the institution and other factors.
At the same time, the ministry of economy is creating its own model of taxation, without copying other regions. “We will be different from the rest," he assured.
You can borrow, or National goals are a priority
In his closing remarks, the Russian finance minister acknowledged that Tatarstan remains the leader in investment attractiveness along with Moscow and Moscow Oblast and directed to meet national goals. He recalled that this year a single plan on the country's national development goals until 2030 was adopted in July. The decision was made for the “breakthrough development” of Russia, increasing the country's population, improving the standard of living of the population, creating comfortable conditions and “revealing the talent of each person”.
The total amount of funding for activities within the framework of national projects in Tatarstan is 31,4 billion rubles, including 22,8 billion rubles from the federal budget and 8,6 billion rubles from the budget of the Republic of Tatarstan. As of December 17, the development amounted to 27,8 billion rubles.
“As the regions will work, this will be the overall result. Each subject must involve all the tools — this is the most important task," he urged. According to him, the federal authorities, when adopting the budget, send 1 trillion rubles annually for the implementation of national goals in the regions, but they want to see activity from them.
Anton Siluanov: “As the regions will work, this will be the overall result. Each subject must involve all the tools — this is the most important task”
Anton Siluanov listed new measures of financial support. According to him, it is allowed to take new loans, although previously they sought to reduce the level of debt burden. “Now money cam be borrowed," he said. The repayment of budget loans has been postponed, and commercial loans from banks are allowed for this purpose.
However, the ministry of finance is concerned that budget money has been lying idle for a long time. “The conclusion of contracts lags behind the planned goals. At the end of the first half of the year, when construction work should begin, there is a conclusion. We need to use budget funds as quickly as possible so that they don't lie until the end of the year. We need to sign contracts faster and let them enter the economy, so that they give growth in the region. To do this, they simplified purchases, allowed not to carry out purchases under contracts up to 3 million rubles, but there is little traffic. Inject budget money into the economy quickly," Siluanov said.