Budget 2023, tax reform for individual entrepreneurs and financial reserve

Law on budget-2023 was adopted

The principle of balancing the budget in terms of revenues and expenditures has been preserved. The share of socially protected items of expenditure amounted to more than 60% of the total expenditures of the republican budget. The law-in-draft takes into account changes in tax legislation, which Parliament adopted at the end of September. Consolidated budget revenues increased by more than 625 million rubles. Expenditures remained almost at the same level, the deficit decreased. The primary task remained the same – the fulfillment by the state of its social obligations.

The budget for 2023 provides for a 12% increase in salaries in the healthcare system and teachers in the education system.

The main directions of the budget-2023: healthcare, education and the social sphere. The largest expenditures are planned for the healthcare sector – 920 million rubles. Pridnestrovie with this money will buy medicines and medical equipment for healthcare institutions among other things, pay for consultations with narrow specialists for some categories of children, and much more. 360 million rubles were allocated for the education system in the 2023 budget, 605 million – for the social sphere.

Financing of targeted budget funds will continue. The 2023 budget provides for funds for the Capital Investment Fund – 207 million rubles. The Road Fund (226 million rubles), the Environmental Fund (8.5 million rubles) will work, it is planned to allocate funds to support and develop entrepreneurship (20 million rubles) and youth (almost 10 million rubles). The draft budget law provides for the preservation of the Agricultural Support Fund (20.5 million rubles) and the development of the reclamation complex of the republic (more than 71 million rubles). Funding was provided for the Fund for the Execution of Voters' Orders, which helps deputies repair roads, sidewalks, house entrances and fulfill other orders of voters in the districts at the same level.

The parliamentarians adopted the law on the budget of the Unified State Social Insurance Fund together with the law on the budget-2023.

Reform of the system of taxation of individual entrepreneurs

The reform is based on the principle of social justice: more income – more taxes. Amendments and additions were made to the laws "Special tax regime – simplified taxation system" and "Special tax regime – patent taxation system". A new approach that establishes different rules for doing business in Pridnestrovie has been adopted.

The current tax reform proposes to switch from a patent to a simplified taxation system for entrepreneurs working in the retail trade, in other types of activities removed from the patent system, and for those who want to continue importing goods from abroad in order to comply with the principle of fairness. They will pay in this case a tax of 3% on the income received. If you earned 10 thousand rubles a month – the amount is one, if the income 1 million rubles for example – another. If there is no income at all, then you won’t have to pay, unlike the patent fee. It is necessary to use cash registers (cash register or online cash register, as well as a thermal printer for issuing checks) when carrying out cash transactions in order for income to be recorded.

The principle of fairness in the payment of taxes is necessary. It is especially important that additional financial resources that will begin to flow into the republican budget be redistributed to ensure the social obligations of the state, the maintenance of social infrastructure and the payment of pensions, benefits and wages to doctors, teachers and other public sector employees. Changes to tax laws will come into effect on January 1, 2023.

Changes to special tax regimes

Some norms of the laws on patent and simplified taxation systems adopted in September were amended in December. The Supreme Council adopted the amendments that were based on the questions and proposals of entrepreneurs. The concept of innovations has been preserved, and part of the entrepreneurs should start working on a “simplified” basis and pay 3% of real income from January 1.

A ban on work on the “simplification” of construction organizations that participate in tenders for the construction of facilities at the expense of budgets of all levels has been established in accordance with the adopted amendments to the law on the simplified taxation system from January 1, 2023.

2022 budget adjustment

The changes affected the indicators of the revenue and expenditure parts of the republican and local budgets and the cost estimates of the Capital Investment Fund. The adjustment was associated with an increase by 73.2 million rubles of planned indicators for the income of the republican and local budgets.

The deputies managed to form reserves from targeted budget funds following the consideration of all the amendments in the summer. This was the backlog that, in the event of a deterioration in the economic situation, would allow the state to fulfill all its social obligations, according to Chairman of the Committee on Economic Policy, Budget and Finance Viktor Guzun. There was an overfulfillment of the revenue part of the republican and local budgets according to the results of 8 months. Therefore, the marginal expenditures of local budgets were increased by 61.8 million rubles to carry out the necessary work at the facilities under construction and reconstruction. The deputies redistributed the expenses of the Capital Investment Fund, partially reducing the estimate for some objects. New objects have also been added. The total amount of expenses on them is more than 2 million rubles. It was about the Republican Rehabilitation Center for Disabled Children in the village of Giska, school stadium in Krasnoe, boiler room of the Day Care Center for children with disabilities in the village of Chobruchi and some other objects in all cities and regions of the republic.

Formation of a "safety cushion" in the 2022 budget

Work was carried out in October on the next adjustment of the law on the budget for 2022 due to external economic factors and the introduction of a state of emergency due to a reduction in gas supplies and the suspension of the largest taxpaying enterprises. To fulfill the state in full and the term of its social obligations. A table of 100 amendments was formed for these purposes.

Government spending was reduced by 75 million rubles. Almost half of them, approximately 30 million rubles, are directed to the formation of a reserve. Expenses were cut, including within the framework of the Capital Investment Fund, the Road Fund and the Fund for Support and Development of the Ameliorative Complex of the Republic. However, funds were even added under separate articles. For example, on topics that directly relate to the issues of preserving the life and health of citizens.

Increase in limits for the provision of MRT public services 

The state funded an additional 167 magnetic resonance imaging services until the end of 2022. The deputies redistributed the funds of the republican budget necessary for these purposes from the remaining limits of other areas of the healthcare sector. The additional amount is 550 thousand rubles at the initiative of the Chairman of the Supreme Council Alexander Korshunov.

Magnetic resonance imaging is a method of diagnosing tissues and internal organs of a patient without X-ray exposure. MRT services are widely used in various areas of medicine: in traumatology, neurology, endocrinology, gynecology, and to determine oncological diseases. The Ministry of Health maintains strict control over each referral for a procedure. Quota – 16 services per week. There are also many emergency cases.

Tax incentives for participants in home acquisition programs

Citizens of Pridnestrovie who purchase housing using mortgage loans will not pay income tax on the amount of interest paid by the employer organization. The employer organization is exempted from paying a single social tax on the amount of interest paid for its employees on these loans at the same time. Corresponding additions to the laws “On income tax from individuals” and “On the Unified social tax and compulsory insurance contribution” were adopted by the Supreme Council of the Pridnestrovian Moldavian Republic.

The law-in-draft stipulates that the accepted tax benefits are provided once in relation to one property purchased by a citizen when acquiring other real estate objects in the future, these benefits are not provided.

Power generators for social facilities of the country

The state allocated 7.5 million rubles for the purchase of electric generators from the republican budget-2022. The reserves formed in the entrepreneurship development fund will be used for the purchase of power generators. The equipment itself is intended for social facilities and the healthcare system to ensure that these institutions have an autonomous source of electricity in case of possible outages.

Protection of the rights of entrepreneurs

The deputies adopted an addition to the law "On the fundamentals of the tax system in the PMR". We are talking about the possibility to challenge the results of various checks. The parliamentarians clarified at the suggestion of the business community that entrepreneurs can send their comments or disagreement within 5 working days from the date of signing the inspection report. The law did not specify which days previously  – calendar or working.

Help for shoemakers and garment workers has been extended

The PMR Supreme Council retained for 2023 a tax benefit for enterprises in the footwear and clothing industry operating on raw materials supplied by the customer at the level of 2022 in the form of a reduction factor of 1.05. This will help maintain stability in the activities of organizations in the clothing and footwear industries of the light industry, maintain employment of employees and tax revenues to the budget.

According to the results of the first half of 2022, these enterprises began to grow, but so far it has not reached pre-pandemic levels. So, out of 13 analyzed organizations engaged in the processing of tolling raw materials in the light industry, 11 organizations had a positive financial result, for example.

Development of tourism in new conditions

Amendments and additions to the Law of the PMR “On Approval of the State Target Program “Support and Development of Tourism in the Pridnestrovian Moldavian Republic” for 2019-2026” provides for a reduction in funding in a number of areas of the state program.

A number of conceptual changes were made to the state program valid until 2026. The vector of development of the tourism industry in Pridnestrovie is proposed in particular to be shifted to the domestic direction. Another topical direction of the state program is the creation of information centers and points in the cities and regions of the republic. Everyone can get oral information, as well as tourist maps, booklets and brochures about Pridnestrovie. Employees of information centers will communicate with tourists in Russian and English. The first tourist information center was opened on the territory of the Bendery fortress in 2021.

In 2023, as part of the implementation of the state program for the development of tourism, the installation of information stands and signs, support and promotion of the "Visit Pridnestrovie" website and advertising of tourist places of Pridnestrovie on the Internet and international publications will continue.

State support measures extended

Effective support measures have been extended for another year, until the end of December 2023. The main changes to the law on state support measures in connection with the negative consequences of external factors concern business entities of Pridnestrovie and individuals.

The deputies proposed to grant the right to change the maturity of the loan body for a period of not more than six months on preferential loans for investment purposes for the industrial sector of the economy. The issue of extending the loan will be declarative in nature. Measures of state support for the population will remain next year. Thus, parliamentarians voted to preserve the possibility for beneficiaries of preschoolers, schoolchildren and students to receive food packages or monetary compensation for the period of distance learning. This norm was transferred from the law on state support under the conditions of COVID restrictions, which was canceled on the 1st of January.