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Friday, December 9, 2016

Titov suggested to Putin to forgive the offshore


At the end of may the Commissioner for the protection of the rights of entrepreneurs under President Boris Titov will present to Vladimir Putin the “Book of complaints and suggestions of the Russian business” — the list of problems that currently interfere with the lives of our entrepreneurs and their solutions. The list is wide — about 170 pages. He, in particular, includes the limitation of criminal prosecution, “soft de-offshorisation of Russia and Amnesty of capital”, the Deposit insurance business in the devastated banks, changes in judicial and tax systems. However, the main claim of the business Ombudsman orientated to law enforcement agencies that despite the recommendations of the government to reduce the pressure on businesses that continue to “nightmare” business.


photo: Gennady Cherkasov

Boris Titov

The concept of Boris Titov is as a step towards the state and proposals for reduction of pressure on businesses and their employees.

As to the first. The business Ombudsman considers that, in the case of tax evasion to civil liability must be brought not only the company itself but also its leader. It is obvious that tax evasion has as much to budgets of different levels, and on social payments and salaries. Personal responsibility can make business leaders more careful to treat the tax returns as well as to go to the elimination of still existing “gray schemes” of income or expenses, in particular payroll.

As you know, the future pensions of employees are formed from transfers from the funds of the salaries of the enterprises. Therefore, any current “shortage”, which is formed as a result of the payment part of the salary “in envelope” a radical effect on pension income.

However, it is necessary to recall that Boris Titov in the first place to protect not the rights of ordinary workers, and in fact defends the interests of entrepreneurs. Now individual entrepreneurs who have reached retirement age are still required to pay insurance premiums, which affects the growth of shadow employment. Titov proposes to exclude from among the policyholders of the RPF pensioners — entrepreneurs.

In addition, in the case of late payment of the patent one day a businessman is transferred to the General regime of taxation, which is more expensive than a “patent” tax payment (plus 2%). Titov sure that if payment is overdue, you lose the right to the patent system should not. Will only need to pay fines and penalties.

There is another interesting fact. Now, with the revocation of the Bank the entrepreneur is actually losing money on his debit account. He also loses access to credit, if they were on that account, but retains the responsibility for servicing of loans. The whole business of such employer because of pogorevshikh Bank can be destroyed, and employees of “poor” companies will lose their jobs. According to the head of one of the largest state-owned banks, given the current dynamics of the revocation of licenses, as well as mergers and acquisitions after 5 years in Russia the number of banks in the country will be reduced three times. Hundreds of Russian enterprises are tied to a specific credit institution. They are not to blame for the fact that the Bank that provided them with their services, drowned. Titov proposes to repay the loan with funds blocked in the Bank of the Central Bank with the revocation of his license.

Also the business Ombudsman insists that the repayment of the loan in this case can not be recognized as “invalid transaction”.

In addition, Titov recommends that you change the Russian “offshore” legislation. He proposes to extend guarantees from criminal and administrative liability not only on individuals, as it is recorded now, but also to legal persons, i.e. companies. We will remind, the law “On the voluntary Declaration of assets by individuals and accounts (deposits) in banks,” was signed by Vladimir Putin in June 2015 and entered into force on 1 July. The declarant shall be exempt from liability, if his acts were committed before January 1, 2015. It is removed from the obligation to compensate the damage caused before that date.

But in most cases their foreign property such declarants have long been transferred to the accounts of foreign companies and appointed their nominal owners of a legal entity.

Titov suggested that the Amnesty was extended not only to the specific business, but certain companies which own the assets for the benefit of such entrepreneurs. However, in their declarations should disclose not only assets at the moment, but that was sold or transferred to the management of “subsidiary” companies. But the return of such assets to the parent structure should also be simplified.

However, the last listed problematic issues include the movement of business towards the state and require commitment from officials. However, there are more sharp and decisive requirements. From the draft report of Titov it follows that in 2015, law enforcement agencies have identified more than 255 thousand economic crimes. This is the maximum since 2010. More initiated 234 thousand criminal cases. A quarter increased the number of registered crimes under article “fraud” (this is the “favorite article” law enforcement, because it is possible to “impose” any case). Last year there were more than 200 thousand of such crimes — the highest level since 2008.

Most of the entrepreneurs, which were criminal cases, fully or partially lost their business.

According to statistics, 1 February 2016 the number are in jail for economic crimes (sentencing) amounted to 6.5 thousand people. 3 years ago, there were less than half. The business of these entrepreneurs, even if they were acquitted, were destroyed. Suffered they are not alone — these people often, there are “financial cushion” that allows you to live for some time and even go back to their work.

But hundreds of thousands, if not millions of workers had to leave their places. Therefore, Titov insists that the number of crimes of medium gravity for the first violation not to impose criminal penalties. And, most importantly, he suggested that economic crimes are investigated not as now several agencies (currently — the Ministry of interior, the Investigative Committee and the FSB), but only one of them. For example, Italy has long been successfully operating Financial guard, which deals exclusively with economic crimes. However, a similar attempt to create a structure in our country has failed, created in the late 1990s, the Tax police already in 2003-m was eliminated due to its inefficiency.

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