“We have no plans to impose new restrictions”: Tatarstan authorities careful with promises of benefits to businesses

No restrictions are expected yet

At the meeting with representatives of small and medium businesses of Tatarstan in the CCI of the RT, President Rustam Minnikhanov together with the team of the economic block of the government discussed the priority measures to support and extend already introduced ones, which should help entrepreneurs to survive the coronacrisis. Everyone who wanted to get to the meeting could not be gathered in the hall due to the epidemic situation, so many district leaders, for example, participated through Zoom.

At the very beginning of the meeting, Rustam Minnikhanov assured the businesses that there are no plans to introduce additional restrictions related to the coronavirus in the near future. Besides, according to him, “the spring has shown that the introduction of total restrictive measures have had negative consequences for small and medium-sized businesses”

“We see that some regions are tightening measures today. The situation in Tatarstan is [also] tense but stable. We have no plans to impose new restrictions yet. Our task is to ensure that businesses function, but, of course, in compliance with the strictest requirements of Rospotrebnadzor. Our task is to ensure the business operation as much as possible," the president said.

According to him, although all the necessary measures were taken in the spring — “some support was provided to businesses”, but it is better when businesses function themselves — when they just work. He believes that the entire system of the economy should also work, and the authorities should only ensure that the requirements are met so that there are no foci of the disease. As an example, Minnikhanov cited the work of large enterprises in Tatarstan: Nizhnekamskneftekhim, Kazanorgsintez, KAMAZ, Tatneft and others.

Strategy for online retailing development turned out to be successful

The president drew attention to the transformation of businesses that is taking place before our eyes and accelerated by the coronavirus pandemic. He was talking about the transition of trade to “digital environment”. Electronic sales markets is the most effective support for entrepreneurs today, he believes. In 2019, the authorities agreed to support leading infrastructure projects operating online, such as Ozon, X5 Retail, and others — for a total of 12 billion rubles. Despite the pandemic, all these projects have already been implemented, Minnikhanov said, including Kazan-Express platform (an online store with free delivery):

“The situation with the virus has shown that the strategy chosen by Tatarstan for the development of e-commerce was timely. Today we see a 10-fold increase in the number of Tatarstan sellers on these sites, more than 3,500 suppliers offer goods there.”

Public catering asks for benefits under simplified taxation system

One of the first entrepreneurs's proposal was to extend the already introduced tax benefits, or introduce new ones, taking into account the abolition of the single imputed income tax system from the beginning of 2021. As Galina Sharafutdinova, the president of the Association of Restaurateurs and Hoteliers of Kazan, noted in her address, most entrepreneurs would eventually be forced to switch to the simplified taxation system.

The Association of Restaurateurs and Hoteliers suggests reducing the simplified taxation rates specifically for catering at least until the end of 2021 — up to 1% (if the calculation is based on the total income of the organisation) and up to 6% (if the calculation is based on the difference between income and expenses). Sharafutdinova separately thanked the Tatarstan authorities for promptly accepting one of the association's proposals, allowing the work of public catering organisations to be extended for one hour, until midnight.

“For catering companies, this is truly a 'golden hour', which forms a significant part of revenue. As far as I understand, our republic was the first to take this step. We understand and share the concern of the republic's authorities about the growing number of coronavirus cases and ask you to consider a few more proposals that, in our opinion, will not increase the risk of spreading the virus but will give the industry a chance to survive a difficult time," she asked.

The budget is short of 42 billion rubles, so new benefits will be introduced with caution

In response to the offer, Rustam Minnikhanov was in no hurry to promise new benefits. The president rightly noted that due to the coronavirus and tax holidays, the republican budget is already short of 42 billion rubles by the results of 10 months of 2020 . Therefore, the proposal of Tatarstan restaurateurs and hoteliers to reduce simplified taxation rates to 1-6% will be though considered by the authorities of the Republic of Tatarstan but “especially cautiously”.

Nevertheless, the president assured that he had heard the business community and understood that when the postponements end, “business will have to pay”. Both the ministry of finance and the ministry of economy of the Republic of Tatarstan will work on possible preferential rates under the simplified taxation system. The problem, however, is that benefits will have to apply to everyone — it is impossible to give them selectively, the head of the republic believes.

“We are working in a restricted mode, and objectively revenues have fallen”

In addition to preferential temporary rates under the simplified taxation system, the Association of Restaurateurs and Hoteliers of the Republic of Tatarstan also proposed, first, to resume programmes for subsidising food delivery, which at one time made it possible for entrepreneurs to save money (“when the staff was hit, we managed to save production”). Second, to consider reducing the percentage of staff retention for March 2021 to 60% (currently 90%) under the 2% soft loan programme and extending this programme until the end of the first quarter of 2021.

“We are working in a restricted mode, and objectively revenues have fallen. It is difficult for us to keep employees and cooks. And if there were conditions for keeping the number, they would help us," suggested Galina Sharafutdinova on behalf of the association, to which Rustam Minnikhanov promised to write a corresponding appeal to the government of the Russian Federation and the State Duma of Russia, since these changes are the prerogative of the federal centre.

Third, restaurateurs noted that for food delivery, which has become “a real salvation for catering during the spring lockdown”, it would be nice to promote an appropriate online platform so that companies themselves do not search for couriers but use registered services. Such platform operates quite successfully in the UAE. On the platform, each restaurant would have a personal account, there would be no commissions from orders, and a monthly subscription fee of 5,000 rubles would be taken from each enterprise.

The platform itself has already been created and is being in testing mode. It is interesting that the association's partner was the specific bank — Ak Bars: together with the OpenHubService team, the republican platform for organising food delivery service OpenHub was organised. The hub should help launch delivery in an institution in one week “with all sites, applications, bots and social networks, give you the opportunity to see end-to-end reporting and analytics, work out marketing promotions and bonus programmes for your guests”.

The authorities of Tatarstan approved the initiative, and the Entrepreneurship Support Fund is even ready to finance the service for placing restaurants on OpenHub.

“We watched them near the office, called them by phone”

The coronavirus has become the leitmotif of the entire conversation between businesses and government. Attention was drawn to the issue of production and sale of antiseptics. It was raised by one of the producers from Bugulma, the head of TRIS PLC, Timur Bulushev, whose company has been working in this area since 2013 and produces several million copies of products a year. During this pandemic alone, they released more than 1,2 million antiseptics, he said (by the way, Russian Railways is among the clients of TRIS).

In the epidemic of coronavirus, quickly reassessing the situation, the company successfully, according to her, launched the production of antiseptics with a high effective alcohol content (more than 70%). Today, TRIS has a production capacity of 30,000 cylinders a day. The problem is in product sales. As is often the case with retail chains, it is very difficult for local producers to get through to them without federal connections.

“Yes, we are also represented at Kazan-Express, and this platform has quickly gained momentum. But the majority of our sales still goes through offline networks. For example, through Pyaterochka. We even waited for them near the office, called them by phone — then they just stopped answering our calls — we wrote to the site, but there was no reaction!” Bulushev said with regret.

In response, the president proposed to compile a list of effective and high-quality products of Tatarstan manufacturers that the republic would like to promote on federal platforms, including on electronic platforms and in federal networks.

What ministry of economy prepared to help SMEs

The ministry of economy of the Republic of Tatarstan informed entrepreneurs about the measures that Shagiakhmetov's team has already taken to help in the pandemic. First, since August 24, additional business support measures have been in effect, which included new microfinance products aimed at restoring and revitalising the republic's economy, which are designed for the widest possible audience of entrepreneurs. This, in particular, is the Perezagruzka programme for any goals justified by an entrepreneur (121 microloans worth 233 million rubles have already been issued), the Razvitie programme, which encourages export growth and employment of industrial parks and sites in the republic (seven microloans worth 25 million rubles have been issued), and Start — to help young entrepreneurs (so far only one microloan worth 300,000 rubles has been issued).

Since November 13, the Potok programme has been resumed, under which an entrepreneur has the opportunity to receive credit funds with a minimum set of documents, the average approval period is 1-2 days. The agency also promised to implement the interest rate subsidy programme in 2021 (effective from 2017). In 2020 alone, 124 entrepreneurs received subsidies in the amount of 100 million rubles. Besides, 34,273 million rubles will be allocated to support the self-employed (27,761 million rubles — from the federal budget, 6,511 million rubles — the budget of the Republic of Tatarstan).