“Revenue from income tax has fallen by 70%": Tatarstan deputies refuse to raise salaries
The State Council of the Republic of Tatarstan has proposed to suspend the indexation of salaries of civil servants and extend tax benefits for energy companies and tech parks
The unstable exchange rate of the dollar and oil prices, as well as the economic crisis caused by the coronavirus pandemic, have already led to a sharp reduction in income to the budget of Tatarstan. Now revenue from income tax in the republic has fallen by 70%, said Leonid Yakunin, the chairman of the Committee on Budget, Taxes and Finance. On 8 July, during the meeting, the deputies almost unanimously supported the new measures to balance the budget and support businesses. Read about suspending the annual indexation of civil servants' salaries, extending the validity of reduced tax rates for sole proprietors in the real sector of the economy and helping technoparks in the material of Realnoe Vremya.
The republic has lost revenue by 30 billion over 5 months
In 2020, the indexation of official salaries of civil servants, which until now has been increased annually by the level of inflation, may be suspended in Tatarstan. The Committee on Budget, Taxes and Finance of the State Council of the Republic of Tatarstan issued the corresponding bill on 8 July. The draft bill explains the need for this measure by that the coronacrisis has reduced revenue receipts to the republic's budget.
“The draft bill is designed to ensure that the republic's budget is balanced in 2020, and budget savings are possible. Today, you know that everywhere the situation with the spread of the new infection, instability of oil prices and the dollar exchange rate — there is a slowdown in the rate of revenue to the budget of the Republic of Tatarstan. Over five months, the backlog in revenue from last year amounted to more than 30 billion rubles," said the chairman of the Committee on Budget, Taxes and Finance, Leonid Yakunin, during the presentation of the draft bill.
It was supposed to index according to Article 22 of the law of the Republic of Tatarstan 'On the budget for 2020 and for the planning period of 2021 and 2022' on October 1, the deputy reminded. But taking into account the fall in average wages in the industrial sector of the economy and other fields, the situation cannot but affect civil servants either.
“In the republic, in comparison with other subjects, the drop (in budget revenues) is the deepest. Income tax is not received by almost 70%, that is, only 30% is received. Other subjects have a neater situation, there have not been such sharp drops," Deputy Minister of Finance of the Republic of Tatarstan Aleksey Shishkin described the level of revenue cuts to the budget.
The grant to balance the regional budget in the context of the COVID-19 pandemic and compensation for lost revenues in the amount of 13,5 billion rubles received by Tatarstan will not cover even 50% of budget losses, Shishkin said, supporting the new draft bill. The members of the committee supported the changes, and the issue has been included in the agenda of the upcoming session of the State Council.
We continue to develop a whole set of measures to balance the republic's budget, optimise expenditures, suspend certain expenditure items until the end of the year, and save money, said Leonid Yakunin. The initiative to suspend the indexation of civil servants' salaries will be one of them.
“We must rely primarily on ourselves, not on subsidies from the federal budget. If there is the second tranche, they will probably change the methodology to distribute these subsidies more evenly (compensation from the federal government's reserve fund to the budget of Tatarstan was the largest among the subjects of the Russian Federation — editor's note). It is not yet known when it will be — perhaps, in September. Therefore, thank you for supporting the draft bill," Yakunin addressed the members of the committee. “It's a forced and logical measure.”
Tatarstan wants to extend differentiated tax rates of simplified taxation for a year — until January 1, 2022
The second issue on the committee's agenda was the extension of the differentiated tax rates established in Tatarstan for taxpayers applying the simplified tax system until January 1, 2022.
Now the preferential tax system is approved only until January 1, 2021. For taxpayers who apply the simplified tax system and choose “income reduced by the amount of expenses” as the object of taxation, the rate of 5% is set in Tatarstan for organisations and sole proprietors in manufacturing, production and distribution of electricity, gas and water, as well as construction. For other taxpayers who use a special mode, the rate is set at 10%.
“Based on the dynamics of tax revenues to the republic's budget and the benefits provided under the simplified taxation system for previous years, the amount of tax preferences in 2021 is estimated at more than 1 billion rubles. The extension of the reduced tax rates is aimed at supporting the main sectors of the real economy and entrepreneurship in the republic, as well as preserving the number of taxpayers and jobs. The draft bill should be supported in any case: it is still a help," Leonid Yakunin clarified.
The other members of the committee agreed with him, the draft decision to change the relevant bill was supported, and the issue will be put on the agenda of the next session of the State Council.
Tax incentives for technoparks in Tatarstan can be extended for three years
Tatarstan deputies proposed to extend for three years the current preferential tax rate on the property of organisations for technoparks and innovation and technology centres at the rate of 0,5%. In the current version of the law of the Republic of Tatarstan 'On property tax of organisations', benefits are set only until 2021, the new bill proposes to fix them until January 1, 2024, Deputy Chairman of the Committee on Budget, Taxes and Finance Kamil Nugaev said during the meeting.
“The amount of benefits in this category for 2018 amounted to 235 million rubles, for 2019 the figures will be in August, but I think they are also within these limits. The draft bill has all the positive opinions of the president of the Republic of Tatarstan, the Prosecutor's office, Legal Department of the State Council, and Public Chamber. I ask to support," Nugaev addressed to deputies.
Without discussion, the draft was supported by the majority of the committee members.
Replenishment of municipal budgets from environmental fines
The ministry of ecology of Tatarstan has issued a new proposal: to return fines collected in districts for offenses in the field of environmental protection and nature management to the budgets of municipalities. This practice was already in effect in the republic before the adoption of Federal Law No. 307 of August 2, 2019, since its entry into force on January 1, the amount of fines is accrued to the budget of the republic, First Deputy Minister of Ecology and Natural Resources of the Republic of Tatarstan — Chief State Inspector of the Republic of Tatarstan in the field of environmental protection Fayaz Shakirov reminded.
Meanwhile, the funds received from fines in the districts were spent narrowly focused — on environmental measures, and were a help for the regional authorities.
“We propose to supplement the article 41 of the Budgetary Code of Tatarstan with a provision that non-tax revenues from monetary penalties in accordance with the Code of administrative offences of the Russian Federation in the field of environment and nature went to the budgets of municipal districts and urban districts at the rate of 100%. In 2019, the amount of fines amounted to about 34 million rubles. This will be the support of municipalities," argued Fayaz Shakirov.
The amount is small, Aleksey Shishkin agreed with the proposal of the deputy minister of finance of the Republic of Tatarstan, stressing that it can be significant for solving environmental problems in the regions. The project was supported by the deputies of the сommittee.