The Minister of Finance of Crimea Irina Kiviko told RBC that has changed in the regional budget for three years in Russia, as local authorities struggle with grey salaries and what needs to be done to increase the revenues of the Republic
The fight with shadow
You c 1990s years working in the financial, fiscal authorities of the Crimea and, of course, remember, as the Republic lived in the Ukraine. In your opinion, can we say that the Peninsula began to live better after March 2014, at least from the point of view of the budget?
Yes, you can say that the Crimea began to live better. First, it is connected with increase in budget revenues. As the Minister of Finance, I consider the economy and life of the Crimea, on the basis of income indicators, namely tax and non-tax revenues that we collect ourselves. If in 2013, the budget of the Republic of Crimea of about 22 billion rubles of the Central Bank (in terms of USD. — RBC), in 2016 for more than 40 billion rubles, and in 2017, we expect 45 billion. That is, the revenues grew by almost two times compared to 2013. the Second is the number of legal entities and entrepreneurs that we have registered: January 1, 2017 is more than 33 thousand legal entities (growth by 14.5% per year) and 82 thousand individual entrepreneurs (an increase of 26%). More than half of all legal entities has elected a special tax regime, and among the FE almost half of the simplified system of taxation. Revenues from the taxpayers who elected the special tax regimes increases, small businesses grow, that we, of course, pleases.
— I understand that in the Ukraine in the Crimea enough, there was the problem of the informal sector, informal employment, and now the problem persists. Local businessmen in private conversations admit that they pay salaries in envelopes, which means a shortfall in taxes. How do you assess the budget from the potential legalization of the shadow sector?
For the three years in the Russian Federation we had a very large legalization of wages. First, look at the personal income tax, which very well displays the shadow employment. We have receipts for this tax in 2016 amounted to RUB 19.9 billion, an increase of 32% over the year, and the Russian Federation, the increase amounted to 8%. It’s just largely the result of legalization. Of course, this is the result of growth of average wages. Second, we are working on the ground (in the municipalities) and the Council of Ministers, inter-Ministerial working group on the increase in tax revenues. In 2016, for example, as a result of their work 511 enterprises increased official salaries, which are paid all taxes. Additionally received to the budget of 124 million rubles.
— But the problem was that employers paid an official salary is generally less than the minimum size?
— Were the actors. These people actively administration and invited, realizing the economy of his district, realizing what happened real wages. Plus, there were 340 subjects heard, for which there was information about the payment of wages in envelopes. For the year 2016 for those who have been paid wages in envelopes additionally have collected 73 mln rubles personal income tax.
What else is important — the so-called separated subdivisions (according to the law must pay income tax on the location of such units. — RBC). In the Crimea now very much coming companies “from the mainland”, they are registered in other constituent entities of the Russian Federation, pay taxes there. We went non-traditional way — left on objects, and watched how many work staff invited to our Commission. And as a result of this joint work of tax authorities and municipal administrations put on record more than 3800 separate divisions. Budget they already received 1.8 billion rubles.
— Any other reserves you have from the point of view of tax administration?
— There is, for example, the hidden delivery of housing for rent in the summer by the sea. This year we will definitely work with this issue. Last year, we have already started: asked “Krymenergo”, the “Water of Crimea” (the municipal state Unitary enterprises. — RBC) consumption data. Clearly, if the family lives of five people, she has a certain level of consumption, and if there is ten times more, it’s a “mini-holiday”… We have invited people to the tax, offered to submit the income Declaration and pay the tax to incomes of physical persons.
— Only to pay it? And to be in a certain status?
In this case, you, as an individual, self-declare their income and pay personal income tax. And on the way to legalization of, say, individual entrepreneurs we work with the Association of tourist business, that everyone was in equal conditions. Because if someone is working legally, and someone illegally, it is clear that it is possible to dump, etc. We came out with a legislative initiative on patent quarterstaff: that people could buy the patent for two or three months, when they work, and the budget — to get the money. For over a year and the meetings are held in the Federation Council and state Duma legislators are thinking about how to introduce this tool, how it to regulate.
— In the Ukraine in this respect was completely unregulated sector?
— In the Ukraine, even such a large number of individual entrepreneurs (in the Ukrainian legislation “entrepreneurs”. — RBC) was not, as it is now. We achieved growth in almost more than two times. The number, which stood on the account and pay taxes now, at times more. The Crimean population is quite deliberately walked to what is necessary to register and pay taxes. Plus, of course, the role played by the free economic zone: the SEZ law we were allowed to take bets on the patent six times lower in 2015-2016 than in other constituent entities of the Russian Federation, 1 instead of 6%. With 2017, we upped the ante and according to the simplified taxation system and patent, but the period of low rates has provided the opportunity for people to come from the grey zone, became the official tax payers registered in the official status.
— A free economic zone is a serious tax privileges on profit, property tax. It turns out, the budget is a loss?
We specifically analyzed 637 of FEZ subjects on October 1, 2016 (March 10, 2017 participants have already more than 830. — RBC) and saw that the total tax revenues from these regions increased by 1.2 billion rubles. In particular, personal income tax increased by 876,8 million rubles, and the profit tax decreased by 608,2 mln., that is, the shortfall in income tax compensated. This is the result of created new jobs created new production capacity, increased wages in connection with a reduction in rates. That is, we see a positive net effect of the free economic zone.
Is it in the comparable range of companies?
Yes. We took the same enterprise, look at their payments to the budget in 2015 and 2016. And saw that the circle of payers we have a 23% growth in revenues, it is quite high growth for the Republic of Crimea.
In 2017, the total transfers from the Federal budget for the Crimea will be about 100 billion rubles (grants, subsidies, subventions). Crimea is called a highly subsidized region. Is there a realistic plan on how, by what and in what time frame will increase own revenues of the Republic and decrease dependence on subsidies?
— Speaking of subsidies from the Federal budget, we have been 37.6 billion RUB in 2016, the same amount we have this year laid — growth grants no. Subsidies of 64.3 billion rubles in 2017. But they 54.6 billion rubles of the Federal target program for the development of the Peninsula. It is known, has its term until 2020, and needs to solve those problems that we cannot solve at the expense of the Republic. Of these 54.6 billion RUB 22.5 billion goes to the construction of the highway “Tavrida” (will connect the construction of the bridge Kerch and Sevastopol. — RBC): it is clear that if we planned our revenues in 2017 at 45 billion rubles, half of them we would not be able to allocate to the track. At the expense of means of the Federal target program we must also continue the construction of the water supply system of the Crimean Peninsula, which is 2.8 billion rubles for this year. Modernization of preschool education — more RUB 6.6 billion Know in Ukrainian are not built kindergartens. Now we have built ten kindergartens, and we will eliminate the queue that has been accumulated over many years — the region with these problems can not cope.
In 2017 in the structure of expenses of the Crimean budget by more than 23% is in the category of “Education” much more than “Social policy” (16,5%) or “Health care” (8.7 percent). What is this bias with the increase in teachers ‘ salaries?
— In this section not only teachers ‘ salaries, there are major repairs, and capital construction. Health is also quite large, but in education more just because we have schools and preschools are much more than hospitals and other institutions in health care. And employment — teachers, educators, teachers, just more than medical professionals. If to compare with 2013, according to the “Education” we had then to 10.8 billion rubles, and in 2016 already RUB 30.8 billion, on Healthcare was 7.5 billion, and became in 2016 17 billion.
We are for 2016 repaired 33 kindergartens, 22 schools, five health facilities… what we inherited [from the Ukrainian], was in poor condition, nothing repaired since 1960-1970-ies, the money is not invested. So what we’re doing these three years — massively re-equipping, repair and upgrades.
“We pay the budget debts”
— The debt of the Crimea in 2016 increased 13 times. Why so much?
— By 2016, has attracted a budget loan in the amount of RUB 5 billion We have drawn from the Federal budget, because we had to finish our programme of modernisation. Exactly what I said.
For the first time Federal loan is involved?
— Yes, for the first time, in January 2017 we have 3 billion repaid and on 31 March, will solve the issue for another 1.7 billion, that is, we pay to the Federal budget the money held in 2016.
— Besides budgetary loans borrowing there are some in the Republic?
— No, we haven’t taken yet anywhere else.
Commercial loans do not expect?
Commercial loans we have, they are expensive, so we try to participate in the utilization of budgetary credits from the Federal budget.
— The property tax still makes up only a small proportion of all tax revenues (1.2 billion rubles in 2016). What accounts for these relatively low income — with the incompleteness of the transition period in the sphere of property relations?
— We still have here a process of adaptation, because in the Crimea cadastral valuation of the property has not been introduced. So property taxes not yet full. In the future we plan to expand our tax base, of course, and increase tax revenues. Today, we are the only region where the functions of the Federal registration service transferred to our local body — the State Committee on cadastre. They already transfer the database to the tax, there is monthly exchange of information. There is a certain complexity of the technical plan, meetings are held, including at the Federal level. Still identifying all the owners of property and land, do not apply for property rights in a proper manner, engaging them in taxation. Besides, haven’t completed the inventory of assets, and therefore, there is a prospect identify unused property and transfer it in use, that is, raising funds from the rent.