The relationship between business and government in Russia is a 30-year series. It resembles an endless saga of struggle and temporary alliance of two Indian deities.
The common goals are to overcome crises, mutually increase income (often in inscrutable ways), and maintain political stability, without which the very existence of business is called into question, which was well shown in the 1990s. However, more often they doggie than ally, pulling the rope of leadership over themselves.
And here it is important to understand a few axioms.
– There is no big business without power, and the government is interested in big business, because only together they are able to solve large-scale, capital-intensive issues. And this is not in Russia alone, but in any country.
– For smaller entrepreneurs, the attention of the authorities is also invaluable, since only the latter, using its public powers, can provide the necessary legal and financial environment to ensure the growth of small and medium-sized enterprises. Recall that in the United States, defending the interests of their entrepreneurs around the world has become a real gold mine for the economy as a whole.
– Any union is always more productive than enmity, since the latter takes strength and reduces potential. During the sanctions obscurantism and tectonic shifts in the world, this is unacceptable.
– And, finally, the development of entrepreneurship is the way to the development of the entire economy and, accordingly, to political stability. This was shown, among other things, by the Russian experience of the NEP, the Stolypin reforms, and the growth of the 2000s.
In the meantime, there are still conflicting movements on this front. In this context, the “voluntary” collection for business has become a debatable issue.
This idea of a one-time fee was proposed in August 2022 by Western experts from the IMF. It seems that we are in too non-standard conditions to implement recommendations that are not intended specifically for Russia and developed more for “peacetime”.
In addition, it must be stated that the stability of taxation for business is a critical point. After all, the company’s plans include investments, expenses, and scaling up activities. The change (especially not very expected) breaks budgets and plans. Any financier will tell you that this is a headache for him.
On the other hand, the state wants business to invest in Russia, and this determines its intentions for an additional quasi-burden, albeit a one-time one. However, we must remember that in order to invest, mechanisms are also needed. It is not always possible to invest a company’s free money in its industry, there are scale limits, and business often does not invest in another industry, because it has no experience and does not feel the markets.
The way out could be special government bonds “for development”, the proceeds of which would be used only for the purpose of priority projects to support the sovereignization of the economy. The bonds would be guaranteed by the government or the Central Bank, issued directly by the state or project companies (similar to the special project finance company VEB.RF). Then it would be easier for the business to invest free funds.
There are other options for “moving in a two-way direction.” These are real investment benefits for businesses that voluntarily paid a contribution or fell under some unexpected taxes. And various other possible indulgences, including deferments and cancellation of debts.
In such a case, where future opportunities are provided in exchange for current payments, temporary changes in taxation would be understandable. And just a one-time collection will naturally raise the question of how one-time it can become.
Then it would be better to build a matrix taxation system, when excess profits are subject to higher rates in advance, which encourages businesses to invest. However, inspection bodies have many questions about such a system from the point of view of administration.
You also need to remember that the state both in 2020 and 2022 provided business with a good leverage: writing off some taxes, subsidizing interest rates on loans (although they were really high in our country from the very beginning), but other countries did the same – and nothing demanded in return. So it cannot be said that the idea of collection is very consistent with world practice.
As for business, in this case it would be very useful for it to assume the function of public control of budget expenditures. Large and medium-sized companies have a lot of information, a lot of specialists, in order to objectively reflect the situation with budget spending and evaluate their effectiveness. And business with this task, it seems, would have coped best of all.
The author is the director of the Institute for Economics of Growth. P.A. Stolypin
The position of the editors may not coincide with the opinion of the author
