“Self-employed functionaries” and non-ferrous metal exchange appear in Tatarstan
The government of Tatarstan summarises SME support programmes
The implementation of Small and Medium-Sized Entrepreneurship and Support for Sole Proprietorship Initiative national project in Tatarstan was discussed in the republican Cabinet of Ministers on 22 October. Heads of the Ministry of Economy and Centre for SME Supporting Programmes said which entrepreneurs were granted microloans and subsidies on what terms, what credits the state helps businesses to pay and if the statistics on self-employed individuals in the republic weren’t exaggerated. They reminded the entrepreneurs at the same time that 23 days left to submit an application to have their interest rate subsidised. More is in Realnoe Vremya’s report.
How billions will be spent
Opening the briefing, Minister of Economy of Tatarstan Farid Abdulganiyev provided data of the United Register of Small and Medium-Sized Enterprises. The number of people employed in SMEs considering sole proprietors and self-employed individuals totalled 570,300 people as of 10 October.
“This year we’ve launched five regional projects within Small and Medium-Sized Entrepreneurship and Support for Sole Proprietorship Initiative national project. There will be spent 2,635 billion rubles on supporting measures for small and medium-sized enterprises. 1,08 billion rubles will come for these purposes from the federal budget and 1,555 billion from the budget of the Republic of Tatarstan,” Farid Abdulganiyev continued talking about the topic.
According to the minister, over a billion from these sums will be allocated for property support — through construction, capitalisation of private and public and private industrial sites. 721 million rubles will be allocated for financial support in the form of sureties, microloans and subsidies, 418 million rubles will be spent to support small and medium-sized enterprises working in agriculture, 277 million will be on the promotion of goods, 127 million rubles on support for export-oriented representatives of small and medium-sized enterprises.
“362 export-oriented entrepreneurs have been supported since the beginning of the year,” Abdulganiyev said. “64 of them are already exporting goods.”
In 2019, Tatarstan businesspeople have received 263 microloans totalled 605,1 million rubles from the Entrepreneurship Support Fund of the republic, the economy minister said. The Guarantee Fund of the Republic of Tatarstan has issues 178 sureties amounting to 1,1 billion rubles during the same period. And Regional Leasing Company of the Republic of Tatarstan AO provided equipment to nine projects at 45,2 million on concessionary terms from the budget of Tatarstan and gave 27 projects 836,8 million rubles from the budget of the Russian Federation.
Farid Abdulganiyev also said that three industrial parks had received financing equal to 793 million rubles in 2019 — Saba, Tyulyachi and Khimgrad. Khimgrad will spend this money to build seven new industrial buildings to lease them to small and medium businesses. In Tyulyachi, the financial support will be spent to develop infrastructure — provide the industrial park with electrical energy and information services. Saba industrial park will spend the money to construct three buildings for leasing and create engineering infrastructure.
979 million rubles in total have been spent on such measures considering transfers from the Tatarstan budget. Another three industrial parks are created with this money in the republic — Urussu, Arsky and Buinsk.
“A promotion system of republic produce is one of the new tools, which helps create new plants and jobs,” the minister noted. “The results of this system’s operation are isolated but important: entrepreneurs don’t know about each other, spend big money on advertising, while the system brings them together.”
In October, the republican Ministry of Economy launched an experiment connecting to the new digital platform Procurement Management Centre of small and medium-sized business of the republic that prepare recycled metal feedstock. An AI platform accumulates data on all deals in scrap turnover on the borders of Tatarstan, verifies the legitimacy of deals and their participants’ tax status. As a result, accounting, financial and tax control over money flows and deals in this market will be automatic.
This e-marketing centre was created considering businesses’ need for a tool for instantaneous cashless payments and reduction of operational costs. And the state has its own benefit here, the minister noted: “This digital solution will allow increasing the efficiency of metal feedstock recycling and trust in it, exclude feedstock made by shadowy and criminal methods from the chain. Farid Abdulganiyev noted that this solution could also be used in other spheres, for instance, to raise the transparency of deals made by self-employed people.
“The digital solution can become the best experience to copy in other Russian regions,” the minister concluded.
From entrepreneurs to self-employed people to lift tax burden
The head of the Ministry of Economy also said that the republic also worked to improve conditions for self-employed citizens to run a business within the national project. Now over 37,000 people have already been registered, moreover, 87% of self-employed people didn’t register their activity, consequently, they didn’t pay taxes. And during 9 months, the self-employed people of the republic replenished the treasury by more than 50 million rubles.
“Most of the self-employed people work in transportation, the beauty industry, food production, online services,” Farid Abdulganiyev noted. He assured that the republic didn’t deal with doctoring to artificially increase the number of self-employed people, for instance, by registering public workers as self-employed. But he claimed that “if a functionary rents a flat, he is registered as self-employed only here, and he doesn’t pay a 13% income tax but just 4% of this income”.
Answering Realnoe Vremya correspondent’s question later, First Vice Economy Minister Rustem Sibgatullin confirmed that 17% of self-employed people who had worked with another entrepreneurial status previously were small sole proprietors or owners of small enterprises that couldn’t bear the tax burden and took the advantage to lift it:
“It is those who used to pay the tax — sole proprietors, family farms, but a higher tax. This taxation system of self-employed individuals in the national project is one of the elements improving conditions of a small business’s activity.”
Sibgatullin clarified that passenger carriers registered as self-employed more often in Tatarstan. But he didn’t specify who of them but didn’t deny the assumption that, first of all, it is taxi drivers.