Extension of state support for footwear makers and garment makers

The Government proposed extending tax breaks for garment and footwear enterprises until 2022. Today, a reduced coefficient of 1.05 is applied to the income of such enterprises from work on tailoring products from customer-supplied raw materials.

The establishment of the tax benefit was caused by a whole range of problems that enterprises had to face in their economic activities. This is a drop in demand for finished products, a violation of the timing of the supply of raw materials, the instability of external markets, as well as the presence of a number of restrictive measures in connection with the pandemic.

Sales revenues in 2020 decreased in the garment industry by 11.6%, in the footwear industry - by 15.2%. This is compared to 2019. As a result, five out of eleven large organizations in the clothing and footwear industry showed negative financial results at the end of 2020.

In turn, Government support measures had a positive impact on the work of garment and shoe manufacturers. From January to May 2021, the volume of production of light industry in comparison with the same period in 2020 increased by 16.5% and amounted to 639.9 million rubles. Indicators of production volumes of light industry for the specified period in 2021 are also ahead of the indicators for the same period in 2019 by 3.9%.

According to the Government, despite the positive dynamics, the industry still needs government support due to its dependence on imported raw materials and serious competition in foreign markets.

The profile committee supported this initiative and will recommend the Supreme Council to adopt the law-in-draft in two readings at once.