New benefits for small business to be adopted

2nd October 2015

Small and medium business is waiting for tax reduction, improved credit conditions and involvement in public procurement, said the first Deputy Prime Minister Igor Shuvalov at the meeting of the State Council in the Federation Council. In developed countries, SMEs contribution to the economy is up to 70% of GDP and resources employment – up to 80%, said the Deputy Prime Minister.

Now more than 5.5 million companies represent small and medium business in Russia. Their share in GDP is low – less than 20%, while the number of employed, including individual entrepreneurs is about 18 million people. The government set a goal to increase these figures by 1.5-2 times for 10-15 years.
The share of small and medium business in Russia's GDP is now 20% and has not changed since 2007, for example, in the United States it exceeds 60%, and in Italy – 80%.

One of the steps of the anti-crisis program is to give more independence to the regions. For example, starting from 1 October 2015, local officials can establish incentives for small business. Amendments to the Tax Code of the Russian Federation (Article 12, subsection 1 and 2) have already entered into force. For payers of the simplified tax system, according to Igor Shuvalov, there is an opportunity to reduce the rate from 6 to 1%. For those who use a single tax on imputed income, the rate may be reduced from 15 to 7.5% upon the decision of the municipality. In some cases, it is allowed to reduce the rate even to 0%.

Starting from January 2016 the patent system of taxation can be used by entrepreneurs who are engaged in the production of dairy products, leather products, bread and pastries; translations; forestry, etc. Bashkiria was first to react to these innovations. The number of business activities in the region that may be switched to the patent system will be increased from 51 to 67. This is stated in the Order, which was signed this week by the head of the Republic of Bashkiria Rustem Khamitov. Possibility to work with the patent will be given to those who lease real estate, engaged in agriculture, and for restaurateurs, said UfaTime.ru. Also the government of Bashkiria amended the draft law on abolition of the tax rate. The list of activities, for which benefits in the form of zero tax can be provided, is now extended. It includes the consumer services sector: tailoring, shoe repair, hairdressing and beauty services, repair of household appliances, photo studio services and so on.

Apart from that, a new structure to support entrepreneurs in Russia is now being created – the government institution for the development of small and medium business, which will continue the work of the Government Commission on Competition and Development of Small and Medium Business.

Source: Vedomosti

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