State support measures were considered by the Economic Policy Committee

Government initiatives on measures to support economic entities of the republic to minimize the negative consequences of the unfavorable foreign economic and foreign policy situation were considered by deputies at the last meeting of the Committee on Economic Policy, Budget and Finance.

In particular, the Government proposes to amend the law “On the fundamentals of the tax system in the PMR”. It is proposed to extend the measure of state support established by law in relation to business entities of the republic until December 31, 2024 inclusive and to grant the right to grant deferments (installments) for the payment of taxes, fees and other payments to the budget in connection with the negative consequences of external factors for a period within the current financial year and not charge interest on the amount of the deferment (installment plan) granted.

It is planned that the legislative initiative will be adopted in two readings at once at the next plenary meeting, so that year it will work with the onset of the new financial.

Another Government initiative concerns amendments to the law “On Corporate Income Tax”. It proposes to extend the support measures for business entities in force this year. For example, it is allowed not to recalculate the tax base if for the reporting year sales income does not cover the cost of products, works, services sold or is at its level. The moratorium on the so-called “loss tax” in the republic has actually been in effect since 2016 (with the exception of 2018-2019). The law-in-draft developed by the Government proposes to extend the moratorium to the next financial year.

It is proposed to resume the use of the 2% tax rate when calculating income tax for enterprises in the fruit and vegetable industry and the construction industry. According to the analysis, their financial situation has worsened - a reduction in revenue by more than a third was recorded. These organizations generated a negative financial result against the background of maintaining or increasing the level of costs.

In addition, the law-in-draft proposes to extend until 2024 the application of the coefficient of 1.05 when calculating income tax for enterprises in the clothing and footwear industries operating on customer-supplied raw materials because the situation in this sector remains difficult. The tax burden on revenue, despite the relative decrease compared to last year, continues to remain at a high level and amounts to about 18%.