Mikhail Burla, "Unfortunately, there are no estimates of what we will receive as a result of the introduction of new concepts"

The speaker of parliament Mikhail Burla spoke about his attitude to the draft Concept of budgetary and fiscal policy for the next three years, answering questions of journalists during the press conference on the results of the Supreme Council:

"The first issue that raises questions, to which we have not received the answers - how much we should spend on the introduction of the concept of budget and tax policy. This is costly event. For example: software. All organizations without exception will have to change it completely. Who obtains information about how many developers charge for their services, he confirms that it is from two to five thousand dollars. If these costs are insignificant for large enterprises, then they are significant for small. But that's not the point.

Unfortunately, there are no estimates of what we will receive as a result of the introduction of new concepts. It should fulfill at least two functions. First of all, to lead to an increase in tax revenue, that is to reduce the budget deficit. The second function – is stimulating. With regard to additional revenue in the budget: according to all available today calculations based on the volume of profits, which is, and even the potential volume of tax on corporate income and VAT, we will get less revenue, at least in the first stage. It is not clear yet who compensates the losses.

As for the specific taxes. Let’s consider the income tax. To date, the amount of profits that all the business entities get, says about even if we overlaid the maximum profit tax of 35%, we get less money than under the current income tax. Now about VAT. The concept does not describe a mechanism for its return. This issue is the most controversial in the Ukraine and Russia. Then. If we re-introduce the VAT, we need to eliminate import duties, it is accepted worldwide. There is no assessment of how the introduction of VAT will block exemption of import duties. The third point. VAT - is inflationary tax. The population pays it. Its introduction will lead to the fact that prices will rise. No one will say how much, but it certainly will increase. Under circumstances where the state has no opportunity to pay public sector full pensions and wages, this will lead to the fact that the purchasing power of the population decreased.

Countries that introduced VAT, did it in stages. That is, did not start with the maximum numbers of 18-20%, and in the first stage applied rates of 5-6% and then in ascending order. The presented concept does not describe VAT introducing. If we assume, 18% VAT will be introduced immediately, it will lead to more inflation and reduce the purchasing power of the population. If it will be phased in starting at 5%, we will at first receive less income expected from the new system. In addition, the new system involves retraining of accountants. We have 15 years working in the system.

I do not agree with those who parry the fact that we do not understand the market. We understood 15 years, but what now? I think that this is not an argument, because the company trade well with the tax on income. There are various inconsistencies in world practice. There is euro zone and the zone of the pound sterling in the European Union, for example, and for some reason there understanding of each other. Different countries have different railway track, different width, and still they find interfacing. The same situation is with taxes. They understand us. We have successfully sold to Europe, the CIS countries, etc. I do not see any obstacles.

I think we need more time to figure out all the parameters, not to get a big minus as a result in the introduction of this system. I am confident that this system will be introduced over the time. There are some hybrid options: on the one hand, save for some categories of a single system, and another - allow exporting companies to apply the special tax regime. Nobody eliminates such a possibility. But this requires precise calculations and estimates. Unfortunately, we have not seen it to date. Implementation of the system is possible during the 2017-2018 period. I emphasize again, I do not see obvious advantages of the new system. We do not know who and under what conditions will be exempted from the new taxes that will fall as a result of the budget. There must be a complete package that includes laws that will systemize, who and how will pay, then we can calculate that we will receive as a result".