The budget policy of the Russian Federation for 2019-2020
The main objective of the budget policy of the Russian Federation for 2019-2020 is the optimization of government spending and the rational use of taxes and fees in order to ensure the planned economic development of the country, despite all the negative internal and external factors. It is possible that during this period the amount of budget revenues may be significantly reduced, and therefore it will be necessary to close certain social programs designed to support certain categories of citizens.
In the short term, foreign economic conditions can only worsen, which will be facilitated by new and existing sanctions of Western countries. At the same time, the confrontation between the USA and Iran can lead to an imbalance of forces in the international oil market, which is fraught with another collapse in prices for black gold. Given all the negative trends, when developing the main directions of the budget policy for 2019-2020, it was decided to pay great attention to internal structural reforms in order to enable the country's economy to develop in isolation with minimal external impact.
Current sanctions have practically deprived the Russian Federation and its entities of the opportunity to borrow money from other international partners, which means that it will be necessary to cover the budget deficit only at the expense of our own resources. At the same time, the imbalance in government revenues and expenditures may increase: if the cost of oil decreases, it will be more difficult to cover the budget deficit, especially given the lack of access to credit.
One of the priority areas of budget policy for the next two years is the use of all available tools and mechanisms to reduce the dependence of the economy on external factors. And the main emphasis will be placed on domestic markets and supporting the activities of small and medium-sized businesses.
Domestic Market Development
According to analysts, in 2019 the growth rate of the Russian economy will slow down significantly. This will primarily affect investment activity and the willingness of foreign partners to invest in Russian business. Consumer demand is also expected to decline, with the savings rate falling from 3.5% to 2.6%, which will indicate that citizens are not ready to spend their income on purchasing goods and paying for services. Fearing a worsening situation, consumers will save more than spend, which will affect the volume of trade and revenue of commercial enterprises.
But the ministers are sure that by 2020 the economy will adapt to the current conditions, especially since the following steps will be taken:
- Attracting private investors for business development. To this end, the share of investments in GDP will be increased to 25% (currently it is 21.5%).
- Redistribution of state budget revenues.
- Creating favorable conditions for the development of private enterprise. To implement this direction for the next 6 years, a non-burdensome tariff and tax policy will be developed, and a system will be adopted to support banking regulation. The state, in turn, will try to gradually abandon the policy of tight control so that SMEs have more opportunities and freedom in making decisions.
Tax changesAs part of the implementation of the budget policy for 2019-2020. the government plans to make a number of changes to the current version of the Budget Code to mitigate taxation of private business in order to create all conditions for its full development.
SMEs are directly involved in the formation of the budget revenues: in addition to creating jobs and producing products, such enterprises regularly pay taxes, which are subsequently spent on social payments and the maintenance of the state apparatus. But, in view of the high tax burden and total control by the supervisory authorities, some SMEs are "in the shadow", which is why the budget loses some of the revenues. And the government intends to fight this phenomenon by creating for the private business the most loyal conditions for development and going out of the shadow. In particular, this will be expressed in changes in tax rates and even in the abolition of the collection of previously existing fiscal fees. To this end, the following measures will be implemented:
- possible cancellation of tax on personal property;
- simplification of the VAT refund procedure for Russian exporters;
- changing the application of the investment tax deduction, which will help expand the scope of its use;
- the introduction of a tax on professional income, which can be used by self-employed citizens who provide private services, but do not work under the guise of individual entrepreneurs;
- the introduction of certain preferences and benefits for new enterprises;
- levying a new tax in the oil industry (first as an experiment);
- reduction of export duty on oil and a proportional increase in mineral extraction tax;
- a change in the procedure for taxation of real estate, etc.
Support for new businesses
The authorities intend to continue to adhere to the policy of creating an open space, creating all the prerequisites for market players to conduct honest business activities. In the next few years, common customs and tax bases will be created to implement such a strategy, and enterprises will be forced to everywhere introduce innovative technologies in their work that will allow them to use and store digital data.
The authorities also intend to provide maximum support to start-up companies and organizations. They will be given a separate benefit - “start 0”: if the application for registration of a legal entity or individual entrepreneur is filed electronically, then it will be possible to not pay the mandatory fee and reduce the amount of expenses for organizing business activities.
In 2019-2020 the issue of state aid and sponsorship will be raised to a new level, especially since many enterprises are interested in additional financing (credit resources are not always available to private businesses, as banks are very distrustful of new enterprises). It is expected that the funds of the Infrastructure Development Fund, which will be established in 2019, will be used for these purposes.
Business support will be provided by both regional and federal authorities. And in order for the subjects to be interested in the development of private business, annual grants in the amount of 20,000,000,000 rubles will be established, which will be awarded to leaders who have managed to maximize their tax potential.