Farid Abdulganiyev: “Tatarstan is one of the leaders in infrastructural support of entrepreneurship”
The minister of economy of the republic about pressing problems of businesses and more sought-after supporting measures
90 Tatarstan entrepreneurs have managed to get 200 million rubles of microloans since the beginning of the year. And together with other supporting measures, the economy ministry develops businesspeople’s responsibility for state support they received. During an online conference with Realnoe Vremya, Minister of Economy of Tatarstan Farid Abdulganiyev talked about this, major growth factors of the economy and effective tools to attract investments.
171,000 businesspeople pay over 66 billion rubles of taxes
Tatarstan traditionally has an economy of big businesses. Moreover, the share of SMEs was 25,5%. And it’s planned to increase the share of SMEs in Russia’s GDP to 32,5% within the national project Small and Medium Entrepreneurship and Support of Sole Proprietorship Initiative by 2025.
“We plan to achieve 27% thanks to state supporting measures, legalisation of self-employed citizens and a reduction of administrative barriers to businesses,’’ noted Minister of Economy of Tatarstan Farid Abdulganiyev in Realnoe Vremya’s editorial.
He specified that according to the last data for 2018, there are about 171,000 economically active SMEs in Tatarstan, which is by 1,1% more than in 2017. Almost 73,000 of the total number are small enterprises, 433 are medium-sized enterprises and almost 98,000 are sole proprietors.
“Small and medium-sized businesses of Tatarstan paid 66,67bn rubles of taxes to all budget levels in 2018. Compared to the previous year’s indicator, the growth was 11%,” Farid Abdulganiyev provided data.
In answer to the question if the idea of tax holidays for beginner entrepreneurs was seriously considered, the minister said no because Tatarstan in general has lower tax rates in a simplified taxation system. The total rate is 10%, and 5% for some categories. Meanwhile, the rate by Russia’s Tax Code was fixed at 15%.
In answer to the question if the idea of tax holidays for beginner entrepreneurs was seriously considered, the minister said no because Tatarstan in general has lower tax rates in a simplified taxation system
“Moreover, Tatarstan is one of the four regions that joined the project for self-employed workers – a special tax regime Tax on Professional Income. We got a long-awaited reduction to 4% and 6%. This is what was really expected. We know about an upsurge in the number of registered self-employed people in early January. Nowadays we have over 9,500 registered people. Those who apply the special tax regime are provided with a simplified procedure to assess and pay taxes, the absence of filing declarations, freedom of insurance premiums. This allows new entrepreneurs to achieve a higher pace, try their hand at their business, develop entrepreneurship skills and expand their business in the future by choosing the tax regime corresponding to their activity,” the economy minister said.
One reception day for entrepreneurs and new supporting measures
Generally speaking, businesses’ pressing problems and requests are diverse. “As they are so different, in Tatarstan, we created a reception day for entrepreneurs. They don’t have time, they need to get an answer there and then. Time is the most valuable resource,” says Farid Abdulganiyev. “Somebody notes administrative barriers to development, the problem of excessive supervisory and control examinations remains topical somewhere. The problem of a deficit of highly specialised staff is important for medium-sized businesses, somebody lacks information about supporting measures and possibilities to attract additional financing.”
As for the new supporting measures, a project designed to subsidise costs to pay interest on loans taken out in Russian banks is developed. In this programme, entrepreneurs can offset loan interest. A programme on additional equipment of communal, road and engineering infrastructure of accredited industrial parks and production sites is to be approved by the Tatarstan president. The total sum of the programme’s financing will be 100m rubles this year.
Apart from it, the United Credit Centre, which has already received 200 applications, has been operating since last September. It was created to accompany small and medium-sized companies when borrowing money.
The economy minister noted that the main goal of the refusal of non-refundable subsidies is to develop Tatarstan entrepreneurs’ responsibility for the state support they received, as there will be daily control over the use and payback of the money
How to form payment discipline
Undoubtedly, financial supporting measures are more popular among businesspeople. So 200 million rubles of microloans have been granted since the beginning of the year. 90 entrepreneurs from 29 districts of Tatarstan received state support.
At the same time the ministry decided to stop granting non-refundable subsidies to businesses and chose concessional lending. The economy minister noted that the main goal of the refusal of non-refundable subsidies was to develop Tatarstan entrepreneurs’ responsibility for the state support they received, as there will be daily control over the use and payback of the money. According to him, it forms payment discipline and a more thought-out approach to developing a business. The refusal of non-refundable subsidies for businesses in favour of refundable supporting measures will, therefore, allow to cover a bigger number of entrepreneurs and use the subsidies paid back for further development of entrepreneurship.
Supporting measures, including financing – microloans, factoring, surety – aren’t contest based but are to be filed for. Entrepreneurs file documents to the Funds, employees consider the provided documents and hand them to authorised bodies for a decision: the council, the commission and so on.
Five PSEDA to allow creating over 17,000 jobs in 10 years
After discussing small and medium-sized entrepreneurship at Realnoe Vremya’s online conference, we began to talk about details of the project on the mass assembly of Aurus cars in Motorcade project in Sollers plant in Alabuga SEZ.
“Based on available data, there will be made 5,000 cars a year at the first stage, and the production will increase to 30,000 units a year. According to preliminary data, we hope that there will be created over 500 highly qualified jobs at the first stage of the project, and then 1,000 jobs afterwards,” said Farid Abdulganiyev. Over 500 orders of Aurus Sedan cars in total from Russian purchases have been received.
According to Farid Abdulganiyev, priority social and economic development areas are becoming an effective tool to attract investments
The creation of a network of agro-industrial parks is in general a promising area to develop the republic’s economy. A pilot park was built in Zainsk. Another 17 parks are planned in 14 big cities of the republic and in Shali village in Pestretsy District. The next stage is to build rural agro-industrial parks in the other municipal districts of the republic.
“Tatarstan is one of the leaders in infrastructural support of entrepreneurship,” thinks the Tatarstan economy minister. Here there are 85 facilities, including 71 industrial sites. 1,423 residents work there, over 26,000 jobs were created. The production volume in 2018 totalled 143,1bn rubles.”
Active development of special economic zones goes on. 57 residents entered Alabuga, of which 30 run a production activity. 83 companies became residents in Innopolis, and 11 partner companies do their business.
According to Farid Abdulganiyev, priority social and economic development areas are becoming an effective tool to attract investments. 45 residents had been registered by late last year whose capital investments amounted to 5,5bn rubles and who created almost 3,000 jobs.
The operation of five PSEDAs is forecasted to allow creating over 17,000 new jobs, attracting about 67bn rubles of investments including 37,7bn rubles of capital investments in 10 years.