Wouldn’t spill it – Newspaper Kommersant No. 238 (7439) of 12/22/2022

Summing up the results of the year by the RSPP showed that the union assesses the state of Russian companies as a fragile and unstable balance and de facto asks for one thing: not to disturb it with drastic regulatory and fiscal changes, giving entrepreneurs the opportunity, time and resources to adapt to life in an already aggravated conditions. A part of the state apparatus is ready to meet the needs of business — for example, without strengthening formal control and supervision and working out models for minimizing it on a limited pool of inspections. However, the RSPP is clearly more concerned about the growth of meaningful state participation in the economy: against the background of the digitalization of tax control, the Ministry of Finance increasingly perceives not only state-owned companies, but also the entire business in the Russian Federation as a source of operational coverage of budget expenditures.

Although companies managed to adapt to the sanctions in 2022, next year may turn out to be more difficult for the economy – due to the risks of secondary sanctions, new partners may be lost, as well as alternative supply chains built over the year, Alexander Shokhin, head of the RSPP, said yesterday. Since the summer of 2022, the Bank of Russia has been talking about the fact that the adaptation of business to new conditions is being delayed, the economy is being simplified (and hence profits are declining, see “Today’s Date”), and in 2023 the situation will be aggravated by the growth of pro-inflationary factors. Business will also be under pressure from the continuing decline in final demand (see material on this page). Companies have to maneuver between the state’s priorities for filling the budget (and related decisions to increase the tax burden on businesses) and its own efforts to stimulate investment activity (so far, not to increase output, but to maintain production). The outcome is unclear – two trends are clearly visible in the relations between the state and business.

Part of the state apparatus is engaged in easing the burden on business – we are talking, in particular, about its reduction as part of the CND reforms and licensing activities. Yesterday, at a meeting with Deputy Prime Minister and White House Chief of Staff Dmitry Grigorenko, it became known that this work would be continued – risk indicators would be developed in 2023, which would create a transparent and understandable mechanism for assigning inspections. There will also be a prevention system and a risk map to prevent violations, and controllers and businesses will be allowed to conclude agreements to eliminate shortcomings, redirecting the costs of the latter to fines. At the same time, the investment block, supervised by First Deputy Prime Minister Andrey Belousov, is creating incentives for business – this is the SZPK mechanism, and the fine-tuning of other investment mechanisms, and the introduction of uniform investment standards in the regions: in 2023, the authorities will study more than 180 proposals to reduce the regulatory burden on investors. Another track provides for the creation of mechanisms for adapting to sanctions (anti-crisis packages), including support for imports, the removal of currency restrictions and the creation of “loopholes” to bypass sanctions (see Kommersant of December 21).

The second trend is the tendency of the Ministry of Finance to solve the problems of filling the budget at the expense of private business. The RSPP understands the difficulties for the budget and insists on the predictability of fiscal decisions. According to Mr. Shokhin, this year some of these decisions were made without discussion with the business (the rules on using only the cadastral value when calculating property tax, adjusting insurance premiums), in 2021 the MET was increased in the same way and excise tax on liquid steel was introduced. At the same time, the introduction of a tax on dividends was discussed to encourage companies with “surplus returns” to invest. De facto, the conflict of interests of the Ministry of Finance in relation to state-owned companies (as the recipient of their dividends and as the owner responsible for the development of the state JSC), as tax transparency grows, is gradually spreading to all large businesses in the Russian Federation.

A similar picture is observed in the struggle of companies with pressure on them by the security forces – while Delovaya Rossiya is discussing targeted easing of criminal pressure on business, systemic control over tax evasion by businesses intensifies. However, despite the start of work on the humanization of criminal legislation, the easing has not been fully implemented; the RSPP insists on limiting the terms of detention and on alternative preventive measures – bail and house arrest. Delovaya Rossiya is preparing a bill to include “tax fraud” (VAT refunds in violation) in the “entrepreneurial” article of the Criminal Code (Article 159.7), which will free entrepreneurs from criminal liability after paying a fine; similar initiatives for violations of business when working with government orders are also being discussed. The current measures paralyze the economic activity of companies – they lead to its bankruptcy and loss of work by employees (see Kommersant-Online for more details).

Diana Galieva, Oleg Sapozhkov, Kristina Borovikova