Small Businesses Should Receive 3-year Tax Exemption, Titov Proposes

Russia’s business ombudsman Boris Titov believes that small businesses should be allowed not to pay taxes for three years as the respective shortfall in budgetary revenues can be compensated from other sources, Interfax reports.

The business ombudsman says the measure is necessary at the time of pandemic, which is affecting more than 90% of Russian companies.

“We propose to take a decision in support of small and midsize businesses similar to that put in effect in some other countries, for instance, Kazakhstan,” Titov said addressing the audience at a press-conference on the complex changes in Russia’s economy.

The ombudsman called to tax small businesses at a zero rate and “forgetting about them for a time as a fiscal source” for the budget at all.

The total fiscal revenues from small businesses under the special tax regime make about 800 million rubles (approximately $10.5 million at the current exchange rate), the sum which can be easily covered from other sources, according to Titov.

Experts believe it feasible to collect taxes from economic entities subject to the simplified taxation treatment on the annual basis instead of quarterly as today; if it is done, businesses will pay the tax for year 2020 in the first quarter of 2021.

Earlier, the business ombudsman has presented his proposals on extraordinary measures aimed at changing regulation of the economy in the time of crisis he developed basing on a massive survey of businesses across Russia to President Vladimir Putin.

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