Vladimir Putin evaluated measures to support small business

8th May 2015

On April 30th Russian President Vladimir Putin discussed measures to support small and medium business with the Commissioner for Entrepreneurs' Rights Boris Titov.

During on-air question-and-answer session with the President there were a lot of questions devoted to this topic, which has also been recently discussed at the State Council and based on which the head of state gave instructions. According to Boris Titov, these instructions can become a very important step in the development of small business, but it is necessary to implement them in laws as quickly as possible.

“In particular, one of the issues that we are most concerned about is the issue of the “smallest” – self-employed” – said Business Ombudsman. It is necessary that they work openly and legally because administrative barriers (first of all, registration) are still quite high.

Boris Titov proposed the creation of a special interagency working group to resolve the issue of self-employed, who should be registered at the simple scheme, upon presentation of a passport.

The President agreed with the creation of such a group. But he decided that the idea to organize a joint-stock company to support small business and coordinate the work of various institutions (particularly financial) should first be discussed.

“As practice shows, it is necessary to create generally more favorable conditions for the development of a given field of activity. Different structures playing a role of an additional controlling body usually do not give the expected effect. But let us, however, discuss this issue” – said Vladimir Putin.

Another issue, which is reflected in the instructions followed by the State Council, is associated with an article on fraud. For those entrepreneurs who are “forced to break rules as part of their economic activity against each other”, the punishment should be the same – up to six years, – said Boris Titov. “And for those who work with the budget or in the frames of credit institutions bankruptcy – the punishment should be increased up to 10 years.

The development of productive small business was also discussed. “I think there are tax benefits provided”, – said Vladimir Putin. But it turned out that due to the fact that SMEs operate without paying VAT, large companies, if they choose small companies to be their suppliers, have to pay this tax themselves. That is why it is unprofitable for large companies to work with small business, and therefore SMEs do not use preferential tax regimes.

We proposed (Ministry of Finance does not agree with this) allowing small enterprises to use one or another form, that is to work with VAT or without VAT but at the same time still use the preferential tax regime,” – said the business ombudsman.

 “Let us discuss this with the Ministry of Finance once again return to this later” – said the President.

Vladimir Putin also instructed Business Ombudsman to deal with control over the implementation of the law on capital amnesty. “If you see that the law is improperly executed – we can timely respond to it”, – he said.

 “Today we are taking an active part in drafting the law; there is a broad public discussion,” – said Boris Titov. The draft submitted to the State Duma will work,” – he assured.

 “At the same time, another crucially important issue is the issue of guarantees to entrepreneurs: declaring their assets, which they have to do according to the law should not lead to some incorrect implications, problems for them, – said Business Ombudsman. – And in this regard, we need to work with each entrepreneur and if there are any problems, they should where to address.” The President agreed with that.

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