About the problems of development of small business in Russia is not said, perhaps, just lazy. Thus, in developed countries, it is, without exaggeration, is the backbone of the economy, we have him paid little attention. For example, in the United States, Japan and the EU the contribution of small business in GDP is over 50%. While in the States, small businesses provide more than 30% of exports. And, more importantly, this business generates about 25% of patents. We have more modest figures — about 20% of GDP, about 5% of exports, and in the production of patents, the share is insignificant. What you must do to small business was the growth driver of the domestic economy?
Entrepreneurs: where the Shoe pinches
You can certainly talk about the different criteria for classifying enterprises to small, but nevertheless the overall picture is clear. To understand the causes of the current situation and identify ways of overcoming it, probably, it is necessary to try to understand what constitutes a small business in Russia. In recent history it all started with the Law “On cooperation in the USSR” from 26.05.1988 №8998-XI. This document gave the cooperatives the status of legal entities allowed to own the means of production, hire workers, open subdivisions to engage in the production and sale of goods, performance of works, rendering of services, etc. Before that, in 1986, Soviet citizens were allowed to engage in individual labor activity, but only the Law “On cooperation” legalized the establishment of private enterprises. Moreover, it contained a provision stating that the work in the co-op honorary, prestigious and encouraged by the state. It served to promote a positive image of the entrepreneur in the eyes of the citizens. The promotion of the cooperative movement started and the press, television and radio. The number of cooperatives grew. By early 1990, the country has had more than 190 thousand cooperatives employing about 5 million people. However, private industry has faced a number of significant challenges both the ideological and economic properties. To most people it was hard to accept that yesterday defaming and punishing the “shadow capitalists” and “speculators” have now become respected members of society. And in power, similar to the NEP, considered this a necessary, temporary measure related to the difficult economic situation and the need for the legalization of “shadow” economy. A lack of thoughtfulness and some hasty decisions by the state has led to the fact that private traders have developed significant difficulties with raw materials and equipment, the plans of the ministries and departments were not funds to ensure the cooperatives, therefore, competitive advantage was given to those who for a bribe or using a useful link could get state raw materials. Directors of state enterprises opened cooperatives producing products of the forces of these companies, and then sold it at market prices, appropriating the profit. This led to conflicts in the workforce between those who worked for “cooperators” – and the rest — because the first has received a substantial increase in salary. The imperfection of the legislation led to the creation of fictitious enterprises engaged in the theft and cashing of money, the growth of corruption. Remember the criminal case of the cooperative “ANT” is an attempt to sell 12 T-72 tanks under the guise of tractors to an unknown buyer overseas in exchange for computers. On the other hand, the traders at the time played a significant role in overcoming food shortages and consumer goods gave people the opportunity to earn money, creating businesses. In General, have accomplished that task you set before them by the state. But, failing to properly stand up, the cooperatives came under administrative pressure and tax — personal income have been taxed at the rate of from 30 to 90% (depending on income), prohibits certain activities, introduced the cooperative control of prices. According to the then Finance Minister Boris I. Gostev, private entrepreneurs — not just crooks, as “honest work won’t get rich,” but the unscrupulous crooks, chasing only for profit, for the Soviet people it was a heavy accusation. And this duality, manifested in the attitude of the authorities and the citizens to businessmen, formed in the consciousness of society the same dual image of the businessman — all saw only the outside, without hesitation, what risks it bears and how much work puts into his job — most importantly, how can some kind of the shopkeeper to get more, Minister? And the way this is alive to this day, despite the almost thirty-year period. As time went on. With the collapse of the Soviet Union the lives of citizens has changed dramatically. In the early nineties, when it seemed that we have almost of tomorrow will achieve prosperity, faith in the future and the removal of administrative barriers did their job — small business began to flourish, with the highest increase of small businesses came to science and agriculture. The number of employed at small enterprises reached in 1993, a record at the time the figures are 8.6 million people. But the euphoria did not last long. Already in 1995 the number of small businesses began to decline. The falling incomes, inflation, budget crisis — all played a role. Do not forget that in those years when the apparent weakness of the state flourished and organized crime. Small business is the least protected part of the business community has been challenged. Criminal groups substitute for, law enforcement, and arbitration and court bailiffs, and tax inspectors — in other words, replaced for entrepreneurs in the state. With the obvious inability to simultaneously pay taxes and to contain the criminals pushed the business to the care of the shadows. And the advantage was given to those who were engaged in trade, because in this area it is much easier not to pay taxes and to negotiate with the bandits. Played a role and economic policy of the state, special attention was paid to the development of the fuel and energy complex, based on the export of oil and gas. Accordingly, the banking and financial sector has evolved in the same direction. Small business is not interesting to anyone, was forced to survive on their own. Despite the fact that in 1995 was adopted the Law “On state support of small entrepreneurship” from 14.06.1995 №88-FZ, and the first Congress of representatives of small and medium enterprises in February 1996, opened personally by the President B. N. Yeltsin, the state program of support of small and medium enterprises, adopted in 1996-1997, has not received funding for 1998 was not accepted at all.
On the road to development
The next challenge for small businesses was the 1998 crisis. Then ceased operations about 30% of small businesses. Particularly hard hit retailers and the provision of services to the population, which is not surprising on the background of dramatically reduced incomes. Gone are the “shuttles”. However, small businesses in General showed a good survival rate. The impossibility of lending in previous years has led to the absence of liabilities to banks, cash payments in the currency saved many from the effects of ruble depreciation, small businesses are not played in t-bills, were not securities as assets. In addition, the low base effect and a serious rise in price of imports in 1999 led to the growth of the domestic economy. In General, however, during the 90-ies of small business has not received significant development, remaining by the year 2000 at the level of 1994-1995. 90 years, perhaps, was decisive in shaping Russian businessman, teaching him not to trust the state to rely on their own strength, do not rush “out of the shadows” and to engage mainly in trade. With these small business sentiment came in two thousand. The strengthening of state institutions has led to a significant reduction of the role of criminal elements in the life of small businesses, which in turn allowed entrepreneurs to keep at their disposal more income. At the same time began the rise in oil prices — if in 1998 the average price of Brent amounted to 12.7 dollars. per barrel in 1999 and 17.7; in 2000 this figure was 28.3 per. Began to grow incomes, increased purchasing power. However, quite a significant part of businessmen evaded from payment of taxes, used cash in payments, including for payment of salaries to workers. It is clear that this situation could not hold the state. 01.01.99 G. entered into force on the first part of the Tax code establishes General taxation principles, rights and obligations of tax authorities and taxpayers. And from the first of January of 2001 — the first Chapter of the second part of the code covering individual taxes — VAT, excises, personal income tax and unified social tax (UST). Since 2002, the income tax, as well as UAT (special tax regime for agricultural producers) and sales tax, 2003 appear on the simplified tax system and unified tax on imputed income, in the same year, the transport tax, and in the next, 2004, the tax on property of organizations. The country began a tax reform, one of whose tasks was to try to bring a small business “from the shadows”. In 2002-2003, was a large-scale advertising campaign under the slogan “it’s Time to step out of the shadows”.
One of the main actions of the authorities on the legalization of income was the abolition in 2001 of a progressive scale of personal income tax and Institute a single tax rate of 13%. Simultaneously, the contributions (the aggregate of 39.5% of the payroll) were replaced by a unified social tax (35,6% from Fund of payment of labour) with a regressive scale. The reduced rate of profit tax (from 35% to 24%), were abolished a tax on users of automobile roads (2003), sales tax (since 2004). VAT rate since 2004 has decreased from 20% to 18%, and in 2005 the rate of UST was reduced from 35.6% to 24%. Indeed, business thinking about “whitewashing”. However, in 2004, in may broke the “crisis of confidence” in the banking sector. It all started with the sudden cancellation of the licenses “Sodbiznesbank” for failure to comply with AML / CFT legislation. This created panic in the interbank lending market and the outflow of deposits from banks, which led to the fact that many banks began to experience difficulties with execution of client payments. We must understand that then, however, as now, the means of small enterprises in banks are not protected — if the Bank ceases operations, with the money to the account, as practice shows, to say goodbye. In 2004, licenses have lost kredittrast, Promeksimbank, Moselstrasse, Dialog-Optim, and several others. Despite the fact that the Central Bank took quick measures to stabilize the situation, the loss still could not affect the level of trust of entrepreneurs to the banking system, which again forced many to postpone the release of “from the shadows”. At the same time began and the strengthening of tax authorities, giving them new powers. But overall small business, by Russian standards, quite successful. The share of small enterprises in GDP has increased from 12.5% in 2004 to 13.4% in 2007, while the number of small businesses increased over the same period by 29% and reached 1.14 million In 2008, the business environment is again actively discussed the issue of legalization of activities — on the one hand, the “gray” business has become increasingly difficult to borrow, has increased the pressure for tax and law enforcement bodies to tax “evaders”. The 2008 crisis dealt a painful blow, but because of its relative transience, and because of the rapid recovery in oil prices (if the average price in 2009 was 61.9 us dollars. per barrel, in 2010 — 79,6, and in 2011, $ 111. per barrel), due largely to the actions of the U.S. Federal reserve quantitative easing program, small businesses should not perish, but continued to exist. However, talk about legalization was quiet again. So, what is he, Russian, small businesses now? In our country there is a division between micro enterprises, small and medium enterprises. And usually, when talking about small business, mean the whole population of plants, uniting them by the acronym SME (small and medium business). According to current criteria micro-enterprise is not more than 15 employees and revenues of 120 million rubles a year, small enterprise — less than 100 employees and revenue up to 800 million rubles per year, and medium enterprises — from 101 to 250 employees and revenues of up to RUB 2 billion per year. So what do all these businesses? According to Rosstat at the end of 2014 (more recent data will appear not earlier than 2017), among small and micro enterprises, the majority (38.8 per cent) are trade, repair of vehicles, household goods and personal items; 20,4% — real estate operations, leasing and provision of services; 11.9 per cent — construction; 9.5 per cent for manufacturing; 6.8% of transport enterprises and enterprises of communication; agriculture occupied 2.9%; mining, manufacturing, and distribution of electricity, water and steam — 1%. The remaining 8.7 percent are busy with other activities. The share of those working in the field of scientific research and development (and these are the innovation, development of non-oil exports and realization of scientific potential) is 0.7%. Only small enterprises at the end of 2014 there were 2.1 million, of which microenterprises 1.9 million Medium-sized enterprises show a different picture: trade and repair — 26,6%; real estate, renting and services — by 9.4%; construction — 11%; manufacturing — 24.6 per cent; transport and communications 4.4 per cent; agriculture was 16.8%; minerals, electricity, water and steam — 1,6%; other 5.6 percent. Research and development is 0.6%. The number of medium-sized enterprises at the end of 2014 amounted to 13.7 thousand.
Cadres decide everything
And how many people are employed in small and medium business? The number of employees small enterprises — 10.8 million people, including microenterprises employ 4.4 million For medium-sized enterprises are 1.6 million people of Individual entrepreneurs of 5.6 million people and the actual was 2.4 million, it is Important to note that if the number of small enterprises (including microenterprises) in the period from 2010 to 2014 increased, during this same time, the number of medium enterprises fell by almost half (from 25.2 thousand to 13.7 thousand). We should also mention the significant number of businesses that actually operate, have employees, pay their salaries, but never registered, do not pay taxes and do not formally exist. Assessment of MS Golodets, in such enterprises provide employment for almost half of the working population is 38 million people, i.e. almost four times more than in “formal” SMEs. According to Mr. Ulyukaev, those who lead their business and not “legalized”, — 16 million it Turns out that the Russian small business devoid of development, there is no translational motion from a private artisan to small enterprise, from small — to medium etc. the Reasons for this are, I think, only two — the inability to grow and unwillingness to grow.
photo: Gennady Cherkasov
It is clear that the state from time to time recalls the need to develop a small business and is taking measures to support it. Among high-profile initiatives — tax holiday, a three-year moratorium on planned inspections, freezing tax increases in 2015-2018. However, upon closer examination it becomes not very clear how these initiatives will help to achieve stated goals. Tax breaks, i.e. tax exemption in the first two years of existence relate only to individual entrepreneurs operating in the industrial, scientific or social spheres and also in sphere of household services to the population using STS or acting on the basis of a patent, and these entrepreneurs must be registered after the law of the corresponding subject of the Russian Federation in force since the introduction of tax breaks entirely given to the subjects of the Russian Federation. Most likely, this initiative is designed to “whitewash” the self-employed — a whole army of hairdressers, Tutors, repairmen, and manufacturers of various goods, etc. However, why are illegal entrepreneur legalized? This will also bring costs, inspections, required reporting? A business in General, and business can not be called — rather as a kind of earnings needed to survive. And these people do not set themselves goals of development, increase of capitalization, access to new markets, etc., Respectively, for legalization need to come up with something else. It is clear that their costs in any case will grow. But what they get in return? Of course, the easiest way is to put them all either “out of the shadows” or be prepared for dire consequences — administrative, tax and criminal prosecution. However, you must understand that some of these entrepreneurs will not be able to bear the additional costs, do not want to register and will curtail the activity. You have to imagine how many people will be unemployed, how many will fall significantly income in advance to understand what to do with them? Otherwise, given the scale of informal employment, rising social tensions can not be avoided. Also be aware that often the “garage” economy is an additional source of income for local officials and security forces — will they promote legalization, depriving themselves of this income? And what impact the increase in the number of job seekers on the level of wages in a particular region? As the decline in revenue will affect the trade? In a word, to solve illegal enterprise tax breaks is not enough. And there is still some inconsistency, inconsistency of action — for example, the increase of social payments with the UI that caused in 2013, the cessation of legal activity by about half of entrepreneurs (because we don’t know how many of them really stopped working, and how many continue the operation without the status of entrepreneur), increased the distrust of the state. This divergence signals the business community can be extremely difficult solution to a very complex issue of the legalization of self-employed people.
Under the “hood”
The moratorium on planned inspections of business, on the one hand, indicates the authorities ‘ awareness of the redundancy of the excess of such checks, the destructiveness them to small business development. And on the other — in the process of implementing this initiative, she was completely emasculated of all types of inspections restrictions relate only to transport control and supervision in the field of advertising, construction and inspections of compliance with labour legislation. And just in case, if during the preceding three years, the company did not commit any gross violations of the law. But restriction of routine inspections does not mean complete lack of control — unscheduled inspections can be carried out without restrictions. What it takes to organize a “citizen” inspection bodies with complaint — knows for every entrepreneur.
Freeze tax increases — very sensible, good initiative. In conditions of instability of the immutability of the obligations to the state allows businesses to better plan, but more importantly, it inspires confidence, creates a sense that the government is mindful of the entrepreneurs, counts them in a difficult time and willing to help. But what happened in reality? Officials, preoccupied with their tasks and plans, took the initiative a little differently — to collect to the budget as much as possible, but the tax rates change this is not. The results of this approach illustrate very well the changes in order of calculation and payment of property tax in respect of property: book value is used cadastral (and it is significantly higher) and expanded the circle of taxpayers (property tax on real estate to pay even those who use the STS). No doubt, taxation on the cadastral value is correct and fair, but in time? Intensified work of the commissions on “the legalization of the tax base” — in fact, they are set for the businesses profitability of the business. Not the increased profitability leads to higher taxes paid in absolute terms, and the semi-legal statutory minimum tax payments of entrepreneurs who have seized most of the declining profit to thinking, maybe it’s time to stop the activity? The hassle a lot of money than why continue? Especially with the increasing monopolization, restriction of competition. Thus, according to the Federal Antimonopoly service, for the period from 2005 through 2015, the state share and state-owned companies in GDP increased from 35% to 70%, and the main reason for decreasing competition entrepreneurs believe the actions of the authorities (58% of the respondents RSPP). Of course, we cannot forget about the other programs of support to SMEs. Subsidies from the Federal budget to constituent entities of the Russian Federation to support SMEs amounted in 2012 to 20.8 billion rubles, in 2013 — 19.8 billion rubles., in 2014-m — 19,4 billion rubles. That is, the amount of subsidies is reduced. This increases the share of state contracts concluded with small enterprises — in 2012 the share of such contracts was 14.2% of the total number of contracts, and in 2013-m — 13,9%, in 2014 this figure was 22.7 percent. But the value of these contracts amounted in 2012 to 2.7% of the total cost of all contracts, in 2013 and 3.1% in 2014 and 6.1%. According to the Ministry, at the end of 2013 in Russia there were 133 business incubator where residents were 2140 small businesses, and at the end of 2014 the first of these incubators was 139, and residents, respectively, 2319. Farmers who received grants under the program of livestock development, was in 2013, 797, and in 2014-m — 742. Grant support in 2013 received 2870 beginning farmers, in 2014-m — 2441. There is also a programme of support for microfinance institutions and guarantee funds implemented by the Ministry of economic development. Of this program by the end of 2014, the current was 293 28 loans for a total amount of 13 billion rubles, the Number of outstanding loans issued under the guarantee of guarantee funds, amounted to 13 388 for a total amount of RUR 112.8 billion. Finally, you created a Corporation for the development of SMEs and, accordingly, the development strategy for 2016-2030 period. Strategy is filled with good and right direction. For example, attention is paid to the development of competition. However, how it will be implemented in the conditions of present growth of state presence in the economy — is unclear. How to interpret the provisions of the Strategy concerning the development of trade undertaken by SMEs, the background to the demolition of stalls and the actual expropriation of commercial properties for owners. How to believe in the attainability of stable, consistent fiscal policy in light of the fact that even after the announced decision not to raise taxes not cease talking about raising them — for example, the recent proposal of the Ministry of Finance to increase VAT, and the rates of insurance contributions from employees ‘ salaries and GST for applying the simplified tax system?
Best help small business — not to disturb him
We can say that, despite all efforts, state aid to small businesses is clearly inadequate, and issues specific to SMEs, in fact, for thirty years remained the same. This is not surprising in the approach to solving any problems by the method of “give them money”. The state should not and can not give money to everyone. Main, in my opinion, the state’s task is to eliminate those causes that hinder development. The most important issue is the question of trust. The actions of the state should never disagree with programs and applications. Any initiatives should first be studied from the point of view of their impact on the business environment in General. Further protection of the rights of entrepreneurs, the inability of extrajudicial seizure of property. The next step was the weakening of the administrative-tax stranglehold, an end to the vicious practice of determining profitability based on the needs of the state for the collection of taxes, correction of distortions in the tax legislation — is now cheaper to consume, and produce, reducing the tax burden. The development of competition. For legalization of the shadow small business — not intimidation, but the real motivation, not short-term benefits, but real benefits of a legal existence. Of course, all these measures will require time and significant funding and coordinated efforts of various agencies. And the result of such measures cannot be obtained immediately. But the other way is simply no. Small business in Russia can and must become a pillar and driving force of the economy. Over the thirty years of its existence it even in adverse conditions continues to live. And just imagine what you can achieve if you stop to restrain its potential, to create at last in Russia Wednesday, when businesses will develop not despite but thanks? By the way, many of these issues are reflected in the Strategy of development of small and medium-sized businesses. And this is gratifying as to see, to understand the problem — the main thing in the way of her decisions.