Digit of the day: almost 200 thousand individual entrepreneurs and farms disappeared in Russia in 2021

The popular channel "Bla-bla-nomika", commenting on Putin's message to the Federal Assembly, cites astonishing figures that perfectly characterize the process of destruction of small and medium-sized businesses by the state. Recall that Putin said the following:

“Last year, as you know, we cut insurance premiums for small and medium-sized businesses by half, from 30 to 15 percent. This decision will be applied on an ongoing basis and is not subject to revision.

I instruct the Government to submit additional proposals to support small and medium-sized businesses within a month, including tax incentives, affordable loans, expanding product sales, including through purchases from large state-owned companies...".

And here is what the channel's experts write:

“The President spoke, among other things, about small and medium business, and I would like to hope that something in this area will really start to move. Otherwise, things are getting worse and worse so far! In particular, according to the statistics of the Federal Tax Service on state registration of legal entities and individual entrepreneurs:

- In the 1st quarter of 2021, there is the strongest outflow in 8 years from the ranks of individual entrepreneurs (IE) and peasant farms (PF): minus 175.2 thousand entities;

- Negative dynamics is observed in all constituent entities of the Russian Federation, for which the FTS provides data (these are 84 out of 85 constituent entities - all except for the Nenets Autonomous District). The most significant reduction in the number of individual entrepreneurs in absolute terms is in Moscow, the Moscow Region, St. Petersburg and the Krasnodar Territory.

Analyst Ilya Grashchenkov was skeptical about plans to support small and medium-sized businesses:

“The Ministry of Finance is preparing the population to increase taxes, the thesis is being thrown in that the tax burden in Russia is one of the lowest in the world. Since the personal income tax rate in Russia does not exceed 15%, while in many countries it reaches 35%, but this is far from the case, we just decided not to call part of the taxes taxes, but the so-called. quasi-taxes (fees included in expenses, for example, transport), put the Russian Federation in a number of countries with the highest burden. And considering the insurance fees, which are 30% of the salary, we are generally almost among the leaders.

Therefore, a business that has barely recovered from the blow of a pandemic runs the risk of closing down altogether against the background of such prospects. In principle, there is an opinion that SMEs (small and medium-sized businesses) are not really needed by a country with a rental economy, and in the era of modernization they can be sacrificed by squeezing out the remaining funds. Owners who are not tied in income to the state are, at best, "fellow travelers" of the authorities, and at worst, enemies, since their development also requires political freedoms for these "frauers". In addition, the introduction of the concept of “self-employed” is another attempt to lure out of the gray zone the most “fat” representatives of small business. Considering that this status was never able to acquire legal grounds, it is likely that soon it will be equated with an individual entrepreneur.

Thus, it is the state that will become the main owner and distributor of goods, money and jobs..."

Experts from the Kremlin Bezbashennik channel add:

“Having destroyed the structure of the labor market, it will not be possible to restore it overnight. In the countryside, as has been correctly noted, people are in no hurry to get a job in the agricultural complex - after the collapse of the agricultural complex in the 1990s, the population got used to spinning from time to time, interrupting subsistence farming and "covens", and returning them from the precariat (a class of socially unsettled people, not with full guaranteed employment, ed.) in the salariat (the upper middle stratum, with a stable full employment and salary, ed.) on a command from above will not work. In the best case, it will be possible to knock out some taxes from them - and even then if you drive the whole country into bank transfer with strict control and force the shabashniks to become individual entrepreneurs or self-employed..."