MPs plan to adopt two anti-crisis bills

03/24/16 21:59

MPs plan to adopt two anti-crisis bills

The anti-crisis amendments are being debated as for their efficiency in addressing economic challenges amid reduced tax allocations to the budget

Tiraspol, 24 March. /Novosti Pridnestrovya/. The government and the Supreme Council are continuing to work upon anti-crisis amendments. On Monday the parliamentary committee on economics, budget and finance spoke up for the approval of the government's anti-crisis package. Today, the committee has considered anti-crisis amendments submitted by people's deputies. They have been worked out for a year: first presented in February 2016, they have already been under discussion for a month.

«These bills do not contradict each other. If both bills are approved, we may say about a complex anti-crisis programme aimed at supporting both enterprises and Pridnestrovie's population," explained the head of the committee, Alexander Martynov.

According to him, the amendments aim to support enterprises under difficult economic circumstance, their potential and personnel, as well as to «stop the degradation of the economy».

The anti-crisis amendments are being debated as for their efficiency in addressing economic challenges amid reduced tax allocations to the budget. According to government representatives, passing some amendments will result in the shortfall of budget revenues. MPs believe that this anti-crisis programme will not affect in the short run the financing of the budget's social protection items on condition that government spending is optimised and additional funds are allocated.

«The real sector of economy is not enough to finance high government spending," Alexander Martynov believes. «The government must refuse unproductive expenditures. It is necessary to expand fiscal space — to increase the number of tax payers without raising taxes.»

At the same time, according to the Minister of Finance, the financing of wages and pensions account for 62% in the structure of government spending. The other items are as follows: healthcare — 17%, social policy — 17%, security — 16%, education — 9%, defence — 7%, administration — 5%.

Upon the consideration of 50 amendment proposed by people's deputies, a considerable part of them was recommended for withdrawal. It was resolved, however, to submit the most conceptual proposals for consideration of all lawmakers.

Thus, it was proposed to introduce a series of changes in the law «On corporate tax» in order to grant extra income tax allowances to some enterprises.

It is recommended to fix a 1.5 income tax ratio for two years (instead of the present ratio of 2) for light industry toll manufacturers. It was earlier proposed to fix this ratio at 1.7. According to the ministry's information, reduced tax ratios will lead to the shortfall of budget revenues: with a ratio of 1.7 the government's coffers will lose 13 million roubles, and with a ratio of 1.5 even more — 22 million.

It is also proposed to exempt newly established manufacturing businesses from corporate income tax in the first five years. It is specified that this benefit will not apply to «new entities established as a result of restructuring on basis of former enterprises».

The Ministry of Finance believes that this regulation will also result in budget shortfalls as the income tax is a considerable source of coffers replenishment. Besides, the proposed regulation may be used for lucrative purposes: businesspersons will be able to evade the law and taxes by legally establishing new enterprises with already existing equipment.

In is noted, meanwhile, that the current legislation already provides for allowances for newly established businesses. Thus, new organisations producing agricultural goods, food products, medical equipment and medicine benefit from special income tax tariffs: in the first year — 0%, in the second — 25% and in the third year — 50% of the fixed tariff. Nevertheless, the economics committee members consider these measures are not quite attractive for investors.

Another amendment provides for a 50% income tax reduction for footwear factories and chemical plants until 31 December 2017.

An amendment on the temporary abolishment of a 10% duty on the purchase of new housing for foreign citizens. According to lawmakers, this may galvanise Pridnestrovie's real estate market. At the same time, government representatives noted that this regulation would put Pridnestrovian citizens in an unfavourable position in relation to non-resident, who often buy real estate in Pridnestrovie for the sake of social benefits. Besides, the abolishment of the 10% duty for foreigners will deprive local budgets of an additional income item.

The efficiency of other amendments from the parliament's anti-crisis package was also discussed. By April they will have been finalised with regard to the government's proposals and brought before parliament.

 

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