An increase in profit tax would have been more acceptable to businesses compared to the recent practice of unpredictable levies and one-off exactions, stated Alexander Shokhin, head of the Russian Union of Industrialists and Entrepreneurs (RSPP), at the International Forum of the Financial University, as reported by Forbes.
"We advocate for transparency. Then both the Ministry of Finance and businesses will be happier, and the latter won't have to bitterly lament," Shokhin explained. He noted that companies could accept a clear increase in taxes if provided with new investment deductions and an expansion of existing ones. The current situation, however, is causing far more problems.
Shokhin reminded that a year ago, the government introduced a one-off windfall tax, effectively setting a precedent for retroactive collections. This measure was adopted in response to a sharp increase in the budget deficit.
This year, the government decided against repeating the windfall tax but introduced new duties directly linked to the ruble exchange rate, affecting almost all exports. Many companies, Shokhin emphasized, are now paying amounts comparable to the profit tax.
The head of the RSPP noted that businesses are no longer merely asking to be left alone regarding tax increases; they seek clarity on how to plan for the long term. In the case of one-off and unique decisions, the future of businesses becomes uncertain.
"Many decisions to increase budget revenues are positioned as one-time. However, the budget tends to get used to many of these temporary solutions, and they become permanent," he observed.
In early September, Shokhin pointed out that entrepreneurs were increasingly concerned about the nationalization of property. In circumstances where no one knows who might be next, it is challenging for large businesses to grow.
