From "500 days" to 500 points
Clearly, the planned measures will have a positive effect on the economic recovery, but major innovations are unlikely to be expected, says Mikhail Begunov, Tax Compliance Managing Partner. Thus, in terms of supporting the citizens, the initiatives seem good: transitioning to remote work without a problem, direct payment of sick leaves and allowances, minimum hourly wages under the conditions of part-time employment. But all these initiatives are isolated and we shouldn’t expect any global effect.
It is doubtful that we will manage to reach the income levels of 2019 before the second quarter of 2021, says the expert. At the moment we can notice a purchasing power loss and a rise in unemployment levels. We should also take into consideration the possibility of new outbreaks of the virus, that might lead to changing the deadline for achieving the goals set in the plan.
As for the stabilisation of the financial situation of SME, the affected industries, in 2021 the government is planning to reduce tax liabilities for these industries by eliminating the indexation for insurance premiums paid by Individual Entrepreneurs (self-employed persons). This will allow to include the costs of sanitation of the facilities in the corporate income tax expenses. In particular, they are planning to develop additional criteria for applying a simplified taxation scheme for those businessmen who have lost this opportunity in the current period.
Mikhail Begunov is convinced that this measure will provide an opportunity to reduce the tax burden for taxpayers by the remission of taxes paid due to general income taxation. The government also plans to provide additional support to the tourism industry, which has suffered the most from the effects of lower consumer demand, by providing VAT preferences in the form of a reduction in the tax rate from 20% to 7%. This will reduce the tax load of this category of taxpayers from 2021.
By the way, adds the expert, earlier government measures such as providing tax incentives or deferral of VAT payments did not apply to either the subjects of more affected economic sectors or any other categories of taxpayers.
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