Government approves mechanism of levying offshore duties

10/07/15 19:20

Government approves mechanism of levying offshore duties

The monetary funds will be accumulated in the social stabilising fund and allocated for the payment of pensions and salaries to public sector employees
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In compliance with the president's instructions, the government has worked out decrees determining the order of accounting and levying offshore duties. It should be recalled that the executive body proposed to regulate the issue of collecting offshore duty at a legislative level. Some draft laws, however, have been rejected by the Supreme Council, and one of them is still under consideration.

According to the deputy prime minister, Maya Parnas, the elaborated order of levying and accounting duties, currency funds, products and services that are transferred between residents and non-residents registered in offshore zones will help to allocate extra revenues to the social stabilising fund and further for the payment of salaries to public sector employees, pensions and allowances.

«From 2012 to July 2015 over $1 billion was transferred to offshore zones, and at the same time the difference between the amounts transferred to offshore companies and amounts transferred to Pridnestrovie's residents makes up about $292 million. This disproportion has been increasing from year to year," said Maya Parnas.

The approved governmental decree «On Effective Means of Regulating the Importation of Some Works and Services to the PMR» provides for the appointment of the State Reserve Fund authorised foreign economy subject that has the exclusive right to make payments for the importation of works and services indicated in the corresponding list.

The list includes production, transportation, insurance and other services; securities trading, credit and deposit operations; organisation and implementation of exhibitions, auctions, conferences, symposiums, seminars and other services; barter transactions and other counter trade activities; leasing and other operations. The State Reserve Fund is the only authorised subject to make payments on the above mentioned transactions.

«Transferring funds to offshore companies as well as from offshore companies to Pridnestrovie will be charged 10% of each transaction. These duties will go to the State Reserve Fund and the following banking day will be transferred to the account of the social stabilising fund, opened in the national budget, and used exclusively for paying salaries and pensions," clarified the deputy premier.

The document also suggests allowing foreign trade agents to pay directly 10% of a foreign trade contract amount to the social stabilising fund without entering into contractual relations with the Social Reserve Fund.

The decree «On Effective Means of Regulating the Importation of Some Works and Services to the PMR» will come into effect 7 days after its official publishing.

The government has approved one more decree «On introduction of special customs duties» providing for fixing a special customs duty at an amount of 10% of the customs value of the goods imported to the PMR in compliance with foreign trade contracts signed with offshore organisations.

The special customs duty of 10% will also be imposed on some agricultural products, chiefly crops and oil-bearing crops exported from Pridnestrovie in accordance with foreign trade contracts signed with offshore companies. At the same time, the agricultural exporters whose profits from selling their own products are no less than 70% are exempted from the duty.

The benefit is also granted to the industrial enterprises importing goods, raw materials and equipment for their own production and exporting finished products.

«Customs duty revenues will be placed to the social stabilising fund and be used exclusively for paying salaries and pensions," underscored Maya Parnas, adding that this decree would come into force on the day following the day of official publication.

The finance minister, Yelena Girzhul, said that in 9 months of 2015 over 2.2 billion roubles had come to the budget revenue. And at the same time, about 2.8 million roubles would be allocated for the payment of salaries, pensions and allowances. The excess of revenue over expenditure amounted to 922 million roubles. Taking into account salary and pension arrears of 672 million roubles, the excess amounted to $1.185 billion roubles.

The tax revenues of the Unitary State Social Insurance Fund amounted to 946 million roubles in this period, whereas over 1.5 billion roubles were allocated to the provision of pensions.

«In order to provide the financing of social items in full, tax revenues should be increased by 50% at all levels. Correspondingly, the Ministry of Finance believes that the approval of these decrees will help to pay off in full or partially the existing debt and realise the president's instruction aimed at paying salaries and pensions at an amount of 80% from 1 October," noted Yelena Girzhul.


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