Tiraspol, October, 20. /Novosti Pridnestrovya/. Prime Minister Alexander Martynov discussed interest rate subsidization mechanism with the leadership of the Ministry of Economic Development, State Reserve Fund, Pridnestrovian banks and Tax Administration. Alexander Martynov recalled that thanks to that program, many directions had showed positive results in 2018, the press service of the Government reports.
According to the Ministry of Economic Development, 72 subjects (38 agricultural enterprises, 6 peasant farm holdings (PFH), 26 industrial enterprises and 2 construction organizations) were able to take part in the program in 2.5 years of preferential credit mechanism. Most of the subsidies were received by agricultural enterprises: about 70% of the total amount, equivalent to 26 million euros.
In 2019, this led to an increase in production volumes by 13.5%, increase in acreage and fruit plantations areas. In the industrial sector, the volume of production for enterprises that received loans increased on average by 24.3%, investments in the acquisition of fixed assets, as well as tax payments to the budget and salaries of employees, also increased.
It was noted at the meeting that some companies applying for a preferential loan had made a significant seizure of profits in previous years - about 80-90%.
“Without undermining the owner's right to withdraw dividends, I will share my vision: it turns out that the owners produce scarcity of the investment resource on their own, while this source is the profit of the enterprise, and then they turn to the state with a request to increase this source - to pay from the budget,” Alexander Martynov noted.
In this regard, the Government proposes to strengthen the owner`s participation, that is, to increase the entrepreneur's investments in the development of his own production and to limit the possibility of profit shifting. To this end, the Ministry of Economic Development has elaborated amendments to the legislation governing the provision of concessional loans.
“Our proposals are to limit the possibility of withdrawing dividends for the year preceding the receipt of the loan, as well as during the loan period,” Deputy Prime Minister - Minister of Economic Development Sergey Obolonik said.
In order to calculate and minimize all possible risks, the Head of Government instructed to involve banks in this work.
“In general, I think that it is necessary to outline the standard and focus on the criterion of 15%. We need to outline the standard, which says that the withdrawal should not be made for the year preceding the lending year, for the entire lending period and in the year following the expiration of the lending term,” Alexander Martynov added.
Within a week, the new mechanism should be finalized and submitted to the Government.
Also at the meeting they discussed the types of activities which funds are issued for. Leaders in lending are agricultural enterprises. Many of them carry out a full production cycle in the republic: they grow and process products in Pridnestrovie, which in general has a positive effect on both job creation and budget contributions. Questions arise for land users involved in the cultivation of grain and industrial crops and sending them for export. The specialized department, together with the Union of Industrialists, Agrarians and Entrepreneurs of Pridnestrovie, the State Reserve Fund, was instructed to study the lending effectiveness.
