Taxes and Small Scale Business

On January 17, within the framework of the Gaidar Forum, an expert discussion on the topic “Small Scale Business Taxation in Russia: Development Scenarios” was held. Participants evaluated the taxation role in small scale business development in Russia and debated the directions for taxation system reforming. 

Nikolai Milogolov, Senior Researcher at the Tax Policy Center at the Finance Research Institute of the Ministry of Finance of the Russian Federation appeared as moderator of the discussion. Starting off the event, he pointed out, that Small and Medium Scale Businesses constitute the core economy in the West countries. If one conceptualizes the increase of the small business contribution to the national economy, this means taxation. Discussion moderator raised a key question: how does taxation influence the development of small scale business in Russia? 

“Most entrepreneurs regard taxing authority as a punitive agency. The communication between entrepreneurs and taxation authorities should be transparent, clear, and simple. Entrepreneurs need to know how much must they give to the state”, said Sergey Zelenov, Deputy Chairman of the Committee for Accounting, Fiscal Management of the All-Russian Public Organization OPORA RUSSIA. 

Milyausha Pinskaya, Professor of the Department for Fiscal Policy and Customs-Tariff Regulation in the Finance University of the Government of the Russian Federation, in answering the set discussion question, said, the small scale business was continually a field for experiments. For instance, she mentioned the introduction of the tax for self-employed person in four subjects of the Russian Federation. The professor pointed out inadmissibility of regarding taxes as one and only one regulatory mean for business. 

In the coarse of the discussion, the moderator raised the question, what direction should the reform of the fiscal system take. Is it reasonable to retain special taxation schemes or to introduce rebates within the general scheme? Participants expressed different views to the issue. 

Alexander Kalinin, President, the All-Russian Non-Governmental Organization of Small and Medium Scale Businesses OPORA RUSSIA, assumes, that “the special fiscal schemes was wisdom and a benefit”. He asked, how a very recently established enterprise can pay taxes within the general fiscal scheme. “It will die before the first report filing. Such enterprises will withdraw into the shadows, they are not ready for it. The creation of the special fiscal schemes was reasonable, other way we had no small scale business”, the expert said. 

Vladimir Gromov, Senior Research Fellow of the Laboratory for Fiscal Policy, RANEPA, noted in his presentations the weaknesses of the special fiscal schemes. He however assumed, the particular alteration issues required comprehensive elaboration. Regarding ideal approach, the special schemes had to be voided, he said. 

Nikolai Milogolov, moderator, concluded the discussion. He noted that the participants could hot come to a consensus, but they managed to designate the tender points of the small scale business taxation in Russia.

All records of live broadcasts from the Gaidar Forum 2019

10th Gaidar Forum Organizers:

The Russian Presidential Academy of National Economy and Public Administration (RANEPA);
The Gaidar Institute for Economic Policy (Gaidar Institute);
The Association of Innovative Regions of Russia (AIRR).

The general partners of the Gaidar Forum are Gazprom and Gazprombank; strategic partners include Prosveshcheniye publishing house, Coca-Cola, Pharmstandard group, ACIG Group of Companies, the Russian Textbook Corporation, SANOFI, Novartis, Johnson & Johnson, Russian Railways, MSD, and Mastercard; EY, Cisco and Russian Direct Investment Fund are partners. This discussion’s partners are Philips, Cherkizovo and RVC.

The general information partners of the Gaidar Forum include the Rossiya 24 TV channel, Forbes global media company, RBC and TASS news agencies. The official information agency is Rossiya Segodnya. The general radio partner is Business FM. The strategic information partners are Kommersant Publishers, the RT TV channel, Interfax and Gazeta.RU. The main information partners are Profil weekly, FederalPress news agency, and Invest Foresight online magazine. The international information partners are Sputnik and Cision. Other media partners include PRIME news agency, Rossiyskaya Gazeta, RNS news agency, Radio Ekho Moskvy, News.Ru,, Parlamentskaya Gazeta, the PRO BUSINESS TV channel, Strategia magazine, AK&M, BRICS, Ekonomika i Zhizn weekly, National Banking Journal, Expert Tatarstan magazine, the Smart Country information platform, Financial One, Naans Media, and the Public Administration scientific political journal.

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