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. Last Updated: 07/27/2016

Lobbyists Want Changes to Tax Code

MTFrom left, Delovaya Rossia head Boris Titov, Primakov and chamber vice president Vladimir Isakov on Wednesday.
While the government's attention may be riveted to immediate economic and market stimulation measures, the Russian Chamber of Commerce and Industry was focusing Wednesday on measures to help the country's economy in the longer term.

At a taxation forum at the chamber's congress center, the focus was on proposals for changing the tax code in order to spur business innovation.

"Our tax burden on businesses is high relative to other BRIC countries, and we should aim to reduce it," said Sergei Belyakov, adviser to the Economic Development Ministry. "Taxation is one of the most effective tools for stimulating economic growth and increasing investment."

The chamber, which is headed by former Prime Minister Yevgeny Primakov, made its case for changes by pointing out a dearth of innovative business activity in the country, with just 8 percent of all companies engaging in research and development of new technologies.

More than 80 percent of those companies are state owned, meaning that private-sector research and development spending is just 6 percent of the total, compared with 65 percent to 75 percent in developed countries.

Belyakov said possible moves to improve the numbers would be providing a 10-year respite from VAT payment for businesses that comply with specific research investment criteria and simplifying tax accounting and filing procedures.

The meeting came as the government was considering tweaking capital-gains tax rules to promote stability on the country's stock markets, which have been in a downward spiral since hitting an all-time peak in May.

But Yury Nechuyatov, chief financial officer at Troika Dialog, said changes to the taxation regime would more likely act as catalysts of growth after the crisis, instead of instant remedies for businesses suffering in a temporary market downturn.

"I think that most companies and investors would value clarity of tax law, predictability and fairness of tax administration above absolute reductions in statutory tax rates," Nechuyatov said.