Insurance premiums for small business can be halved

20th February 2015

The State Duma deputies proposed to reduce insurance premiums for small business to 14%. This is possible; however it is necessary to find the source of the replacement to the income shortfall, the government says. For example, raising the retirement age might be the option, RBC reports

The proposal was initiated by the State Duma Committee on Economic Policy, Innovative Development and Entrepreneurship. MPs propose to reduce permanently insurance premiums for small and medium business operating in the industrial sector from June 1, 2015 and for SMEs using special tax regimes – from January 1, 2019. This is a part of the amendments that have been sent to the Anti-crisis Commission of the Government and may form the basis for adjusting the federal budget for 2015-2017.

Currently for main categories of business the size of insurance premiums to non-budgetary funds is 30%. Until 2018 the rate is reduced to 20% for small business operating in the industrial and social spheres.

“We propose returning the distribution of insurance premiums by shares between funds in a way it existed prior to 2011” – says the chairman of the Duma Committee Igor Rudensky. At the same time, according to the deputy, the proposal was not discussed with the Government, as well as no calculations have been made on how many entrepreneurs will benefit from a reduced rate.

As of January 1, 2015, 5.5 million SMEs - entrepreneurs and legal entities are registered in Russia. 360 thousand out of these are work in manufacturing, 4.9 million use special tax regimes – the simplified taxation system, unified tax on imputed income (UTII) and patent. The Government anti-crisis plan contains the proposal to double the limits of revenue for companies that can be recognized as small or medium business. This will expand a list of companies that can use reduced rate of insurance premiums. It is proposed to reduce limits to 120 million rubles; for small enterprises - up to 800 million rubles, for medium - up to 2 billion rubles. Earlier, the Deputy Minister of Economic Development Oleg Fomichev explained to journalists that this measure will help to provide access to additional support measures for 7.5-8 thousand companies. The deadline of preparation of the relevant law, according to the plan, is February 27.


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