Russia Prepares Urgent Measures to Support Consumer Market

Russian Minister of Industry and Trade Denis Manturov has proposed to Prime Minister Mikhail Mishustin a series of urgent measures to support the consumer market for a term of six months, TASS reports citing a letter sent to the government, whose authenticity was confirmed by two sources.

The package of measures for a period from March 28 to September 28, 2020 covers all segments of business – both small non-networked and network business and businesses service the consumer market, including production of consumer goods, public catering, wholesale and retail trade, services, commercial estate, logistics – warehouses, logistic centers, pickup outlets, transport, deliveries infrastructure, hotels, etc.

The package of support measures includes abolitions of value added tax for these sectors for a term of six years and a six-month delay for already invoiced taxes, abolishment of income taxes and a delay for already invoiced taxes for a term of six months.

The Industry and Trade Ministry noted that these should be urgent measures of support.

“We must give consumer market players, with the exception of trade in food products, a possibility to take a pause,” the document says.

According to the minister, the sector’s players, including owners of companies, say the crisis period will last for at least six months. “This is an optimistic scenario in case the government takes a package of urgent measures,” the document says.

According to the ministry’s data, revenues of public catering companies, non-food trade and services organizations have already dropped by from 50 to 80% depending on the region. At least 20% of employees have been reduced. Administrative measures to stop it may only worsen the situation, the ministry argues.

“The drop of the sector’s revenues by 50-80% automatically entails closure and impossibility to pay taxes. Tax delays will only result in deferred bankruptcy rather than help resolve the problem,” the minister stressed.

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