The Ministry of Economy reported no demand for investment tax deductions
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Director of the Department of Investment Policy and SME Development of the Ministry of Economy Inna Dadayan said that the investment tax deduction (ITD) as modified in 2018 turned out to be in little demand both among regions and among companies. According to her, the current version of the INV “does not have a noticeable impact on investment growth,” they report “Vedomosti”.
Ms. Dadayan named one of the reasons for the lack of demand for INVs as the fact that the amount of federal subsidies to regional budgets practically does not cover the lost income when such deductions are provided to businesses. She said this at the Tax Forum as part of Russian Business Week.
The Chairman of the Committee of the Russian Union of Industrialists and Entrepreneurs on Tax Policy, Vladimir Rashevsky, spoke at the forum about the need for tax incentives for companies. According to him, the RSPP proposes to introduce INV at the federal level. “It would be possible to create a simple technological norm that would allow giving INV to companies that are actively investing, “with one key,” without the need to negotiate with the region,” said Mr. Rashevsky.
At the end of 2023, part of the amendments was adopted that regulates the INV mechanism. Among them is the emergence of a separate basis for providing INV to businesses that implement investment projects. Inna Dadayan noted that the reform is associated with the transition to a project approach when providing INV and compensation for the lost income of the regions.
In 2023, the investment standard was implemented in 70 regions of Russia. The head of the Business Russia organization, Alexey Repik, said that the new infrastructure is aimed at increasing the attractiveness of territories for capital investments by increasing the transparency of work with investors and supporting investment projects throughout the entire life cycle.
Read more in the Kommersant article. “Regions are aligned to the investment standard”.
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