Comments

Commentary on the RBC article “For the first time Rosstat disclosed share of small and medium-sized enterprises in the Russian economy”:

The aggregate volume of the main segments of the Russian e-business market estimated at Rb 1,357.3bn, Rb 2,031.2bn and Rb 2,347.0bn in 2013, 2015 and 2016, respectively, keeps growing.  It is to be noted that in Russia growth rates of various sectors of e-business are much higher than those of the economy as a whole.

The draft federal budget for 2019 and the 2020-2021 planned period submitted by the Russian Government to the Parliament suggests utilization of funds received from the privatization of federal property as a separate source of the federal budget deficit funding.

Special tax regulations for freelancers, i.e. individuals making their living on their own without engaging labor could be introduced in Russia already in 2019.

In September 2018, the Government of Russia submitted a draft of the federal law envisaging evaluation of the shortfall in budget revenues from tax breaks and exemption as well as their control in the budgetary process along with direct budgetary expenditures, to the State Duma of the Russian Federation. These amounts will be accounted as tax expenditures.

The Government suggested to raise the value added tax (VAT) from 18 to 20% as from January 2019.

Starting 2019, agricultural taxpayers will become VAT payers as well, required amendments to the chapters 21 and 26.1 of the RF Tax Code have been drafted and are about to come into effect.

A license-withdrawing process and procedures for rehabilitation of large Russian banks, such as FK Otkrytie, the Binbank and the Promsvyazbank resulted in worsening of the competition in the banking sector in 2017.

The draft law on anti-US sanctions will be considered by the State Duma before the end of the spring session. The document will permit the government to introduce a ban or limitations on imports to Russia of agricultural products, food, raw products, medicine (except for preparations which have no Russian analogs), alcohol, tobacco and other US-made goods. Also, the initiative calls for introduction of limitations on cooperation in the nuclear industry, rocket and engine building industry, as well as the aircraft industry.

Numerous researchers declare that a new industrial revolution has begun. Development of modern technologies and introduction of robots may cause sporadic growth in technological unemployment.

The beginning of this week was marked by a sharp fall in the ruble rate, which continued in the following days, as a result of which the ruble rate fell to the level of November 2016. Thus, for April 9, the ruble depreciated against the US dollar by 4.3% to 60.66 rub. for dollars, for April 10 - by 3.5% to 62.79 rubles. for dollars, and for April 11 - by 3% to 64.68 rubles. for USD

Last week, the US Treasury introduced new sanctions against Russian companies and businessmen. In total, the list includes 14 companies and 38 businessmen. The Russian financial market sharply reacted negatively to the new US sanctions: the Mosbirdzhi and RTS indexes fell by 8-11%, the dollar rate exceeded 65 rubles, and the euro - 79 rubles.

In 2017, a new 3-year privatization program was launched for 2017-2019, approved with some delay by the RF Government's Order No. 227-r of February 8, 2017. The intensity of its adjustments is still small.

Tax changes, in particular, feasible increase of the personal income tax (PIT) from 13% to 15% with simultaneous introduction of a tax-free minimum, was discussed at one of the first post-elections meeting with Dmitry Medvedev, the Prime Minister (tax – free minimum was not specified in the media).

The topic of tax scoring is widely discussed by the expert community. For the Russian tax field, it is a novelty. In compliance with Federal Law No. 134-FZ on Amendment of Article 102 of Part 1 of the Tax Code of the Russian Federation, a portion of the information which used to be solely at disposal of the tax authorities will cease to be a tax secret and be made public. Initially, it was planned to do so starting from the end of July 2017, however, later the date of implementation of that provision was changed for June 1, 2018 by Order No. MM-7-14/582@ of July 27, 2017.

For the first time since the beginning of the war of sanctions, Russia increased imports of agricultural products in 2017.