THE MINISTRY OF FINANCE IS BEHIND THE STATE

The Ministry of Finance of Russia has reviewed the application of the President of the National Elevators Union (NEU) with respect to the changes to the tax legislation for the period of restrictive measures imposed due to the pandemic of coronavirus COVID-19. Alexey Zakharov, the First Vice-President of NEU, Director General of the Association SO Liftservice, commented the answer of the Ministry of Finance. 

He recalled that since the beginning of the pandemic NEU quickly analyzed the situation in the elevator sector and made every effort to get the state assistance to its members - organizations specialized in the elevator production. 

Among the other things, NEU suggested to reduce from two to one million rubles the amount of the money granting the right to exemption from the duties of the taxpayer (Article 145 of the Tax Code of the Russian Federation), to reduce the VAT rate from 20% to 10% (p. 3 of Article 164) and provide the opportunity for transition to the simplified tax system (STS) during a calendar year. This would allow to reduce the tax burden on those elevator companies that did not have time to move to the STS last year, but meet the requirements for this. 

Unfortunately, the Ministry of Finance did not support the first two proposals, pointing out that these provisions contradict the state policy for support of small and medium-sized enterprises, and reduction of the value-added tax incomes might result in a limitation of the opportunities for funding of the state expenditure obligations, including those in the social sphere. 

The third idea to simplify the mechanism of transition to the STS, as follows from the Ministry response, requires an additional review by the Federal Tax Service in terms of administration of such taxpayers by tax authorities, as well as the need to establish the limits for number of such transitions. 

Alexei Zakharov noted that the last item from the NEU tax initiative package has partially lost its relevance due to slowdown in the rate of spread of the coronavirus in Russia, but the theoretical possibility of repeating such complex economic situations under a similar scenario cannot be dismissed from the accounts. Therefore, if at least this proposal can be implemented, the specialized elevator organizations will have a new tool that improve their financial stability and allow to mitigate the negative consequences of the economic shocks. 

Source:  lift.ru