Spring Cleaning: Russia Finally Manages to Raise Tax Revenues by Shutting Down Black Businesses
The tax revenue for the first five months of the year increased by 1 trillion rubles ($16 billion). The total tax revenue was 8 trillion rubles ($127 billion). Mikhail Mishustin reported this to Vladimir Putin today. It's easier now to pay taxes and sleep soundly.
Denis Davydov will report on the topic.
The Federal Tax Service is one of the most advanced agencies in Russia. Due to digital technologies, there are no crowds at the tax offices. Individuals and legal entities are going online more and more. And they're paying more taxes.
Vladimir Putin: Let's start with the standard question.
Mikhail Mishustin: During the period of January to May 2018, we had a positive trend in tax revenue at all the budget levels, in particular, the combined budgets had 1 trillion more in revenue than these same five months in 2017, which comes out to 8.3 trillion rubles ($131.5 billion). We're happy to see that revenues other than oil and gas grew by more than 10%. Income tax revenues are up by 12.5% due to an increase in business activity and the number of profitable enterprises."
There's more revenue from the income tax and the VAT tax. There's a positive trend in taxes collected for the social security fund. This provides stability for social security payments and free healthcare. Another field of work is the fight against fly-by-night operations.
Mikhail Mishustin: In 2016, we revealed that approximately 1,649,000 so-called fly-by-night companies were operating, which is about 34.2% of all legal entities in the country.
— More than a third?
— Yes. As it was before.
The current situation is incomparable to the previous one. The number of fly-by-night operations has dropped fivefold. Over a million of these companies were cleaned out of the Register of Legal Entities. Which means the economy is cleaning itself of dishonest businessmen.
Vladimir Putin: Let's talk about the results of the new methods you were talking about.
— This is a full set of measures done together with the police, the central bank, and Rosfinmonitoring.
The Federal Tax Service is also interested in self-employed people. For example, taxi drivers, who work while unemployed, or as a side job. The share of illegal transportation is more than 15%. This shadow income is about 75 billion rubles ($1.2 billion). The introduction of the status of self-employed is an effective measure for cleanup.
Natalia Rozhkova, Taxi Company: "This will simplify the tax system, the procedure of certification for passenger and luggage transportation, and it won't be necessary to register as an individual businessman, which is a more complicated procedure".
The tax rate for the self-employed people who provide services for individuals will be 3%, the ones working with companies will be charged with 6% tax rate. the 15 million Russian people who work for themselves at home, as a rule, can register themselves for tax purposes without leaving home.
Mikhail Mishustin: "A mobile app has been developed, which allows registration for tax purposes without going to any registration center and allows paying taxes without tax books or delivering any documentation".
From next year, the system for self-employed will be tested in Moscow, Moscow Oblast, Kaluga Oblast and the Republic of Tatarstan.
Denis Davydov, Alexey Baranov, Natalia Lundovskaya, Alexander Berezhnoy, Vesti.