Feb 04, 2022

President of the Russian Federation Vladimir Putin takes part in the Business Russia Forum

On February 3, Russian President Vladimir Putin took part in the forum of All-Russia Public Organization Business Russia, dedicated to the 20th anniversary of the business association. The event was attended by representatives of the organization from more than 80 regions of Russia.

Opening the traditional meeting with entrepreneurs of the business association, the Head of state congratulated the organization on its 20th anniversary and noted that over the years Business Russia had united actively developing medium-sized non-raw businesses in almost all industries and sectors of the domestic economy, and its branches are open today in every federal subject of the Russian Federation.

«Such a broad representation and deep understanding of the problems of entrepreneurs allows Business Russia to discuss issues of the economic and legislative business agenda in a substantive, absolutely specific way, and to conduct a constructive partnership dialogue with authorities at all levels. I consider such feedback extremely important and, moreover, vital for our joint effective work to evolve strategic solutions on the development of the Russian economy and improvement of the investment climate, as well as to prepare operational measures to support business. For example, such measures were adopted with the involvement of Business Russia and other associations two years ago and recently, too: at the outset of the coronavirus pandemic and as we fight it during all these events», Vladimir Putin stressed.

During the forum, Alexey Repik, chairman of the organization addressed Vladimir Putin with initiatives aimed at stimulating investment activity through the mechanisms of investment tax deduction and investment tax credit. The leader of Business Russia noted that, in preparation for the forum, the members of the association had worked out a significant set of issues, the main part of which was focused on supporting medium-large companies with revenue from 2 to 50 billion rubles. There are about 12 thousand such enterprises in Russia, which constitute a core of the organization. Special SME regimes are no longer available to such companies, but they do not yet possess the capabilities and resources that first-line companies have. «Our agenda today is concentrated on supporting just such companies — their acceleration, finding mechanisms for a smoother transition between categories, turning them into national champions, as well as creating incentives for small growing companies to move out of the comfort zone of the special SME regime and aspire to growth», said Alexey Repik.

One of the possible solutions is to use the mechanism of investment tax deduction. At the last pre-covid forum in 2019, the members of Business Russia drew the president's attention to this mechanism and after that, the number of regions that implement it has increased almost eight times, today already 62 regions use the mechanism. «However, if we talk about the total number of all supported projects in the country, it is extremely low: in 2020 there were 130 projects supported, over the period of 9 months of 2021 — 186. A notable exception is Tula region and our capital. But so far, these examples are just single stories», the chairman of Business Russia said.

The Government has already taken a number of measures to encourage federal subjects to use ITD (Resolution 1704 and the compensation program). To further develop this mechanism, Alexey Repik asked Vladimir Putin to give instructions to help the regions deal with the emerging cash gap, including, possibly, in the form of debt. «Thus, we will be able to accelerate the use of the mechanism and ensure the coverage at least of 20-30% of the 12 thousand enterprises I have designated».

In addition, Alexey Repik drew the president's attention to such a tool as an investment tax credit. In terms of both mechanisms, Business Russia proposes to use the level of the tax burden of the enterprise as a mandatory criterion — the level should not be lower than the industry average indicator. «Thus, we will encourage and support those who pay large sums in good faith, making such behavior not only correct, but also profitable», he summed up.

In turn, Vladimir Putin noted that he considered it possible to write off part of the budget debt of the regions if they financially support investment projects. «Regarding investment tax credits as separate ones, in previous years the total amount was about $130 billion, and in general it is a good resource. But if you believe that the criteria should be expanded to apply this support measure, then, of course, it is worth thinking about», he said.

Other initiatives of the members of Business Russia were also voiced during the forum. For example, Pavel Titov, president of the organization spoke in favor of regulators acting not only as a controlling body, but also as a consulting body for entrepreneurs. He proposed to launch a pilot project and get motivated feedback of the regulator with the participation of Rosprirodnadzor.

Ekaterina Avdeeva, head of the Business Russia Expert Center for criminal legal policy and enforcement of judicial acts, made proposals to reduce legal and administrative pressure on business. She proposed to provide legal grounds for making a decision on refusal to initiate criminal proceedings in case of full repayment of tax arrears before the initiation of the case.

The initiative to introduce a national «green» standard by analogy with the international ESG was made by the head of the Metallurgy Committee of Business Russia Ivan Demchenko. The government and the Ministry of Economic Development are ready to develop such a document, Deputy Prime Minister Victoria Abramchenko said during the forum. Besides, if business feels that there are problems of an administrative nature, then it is possible to create a system for interaction on the issues of the «green» agenda in a «single-window» mode, Putin noted.

In general, the Head of state stressed that all Business Russia's proposals would be taken into consideration. «I hope effective decisions that matter to all Russian entrepreneurs will be made as a result of the today's meeting», Vladimir Putin said.