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. Last Updated: 07/27/2016

Nabiullina Wants Rules Eased for Small Business

Economic Development Minister Elvira Nabiullina on Tuesday proposed a law that would expand the number of enterprises classified as small businesses and are therefore eligible for a simplified form of taxation.

In order to be classified as a small business, enterprises currently must have an annual turnover of less than 20 million rubles ($590,600). The legislation would increase the limit to 100 million rubles.

Speaking to journalists at a meeting with the United Russia party and Opora, a lobby group for small and medium-sized businesses, Nabiullina said the ministry was also working on legislation that would expand small business' access to natural monopolies and government contracts.

Regulations are in the works that would require small businesses to supply at least 60 percent of all government purchases, she said.

The ministry estimates that small businesses will receive up to 1 trillion rubles ($29.5 billion) in state contracts this year.

Andrei Sharov, director of the ministry's department for state regulations in the economy, said at the meeting that the state might consider lowering the base rates for taxes on imputed income for small businesses that work in the spheres of hospitality, transport and food.

The uniform tax on imputed income may be reduced as low as 20 percent, Sharov said, adding that income tax might also be lifted on enterprises qualifying for state grants.

Of the 10.5 billion rubles set aside in this year's budget for the support of enterprises, 8 billion rubles has already been dispersed, Sharov said, adding that 40 percent was being used for loan guarantees, 20 percent for microloans, 20 percent for grants and 20 percent for interest subsidies.

Nabiullina is on a commission created by Prime Minister Vladimir Putin in October aimed at developing the country's small businesses.

The small business-friendly rules are part of the government's response to a major lobbying effort by the enterprises and pressure from President Dmitry Medvedev to make government regulation easier on entrepreneurs.

In response to Medvedev's call for the government to stop "causing nightmares" for small businesses, the State Duma passed a law in September dramatically reducing the number of state inspectors and strictly constraining their powers.

On Monday, Prosecutor General Yury Chaika laid out the rules by which state inspectors can carry out unplanned inspections, which according to the law must be done with the supervision of the Prosecutor General's Office.

Chaika said any unplanned check can only be undertaken if information is received about a possible danger to health, safety or the environment; about an emergency situation; or about damage already inflicted. Further, the information cannot be anonymous.